Japan permits foreign trust stablecoins in payment system

Japan’s Financial Services Agency finalized rules on May 19 that allow qualifying foreign trust-type stablecoins to be used as regulated payment instruments in Japan’s payment system starting June 1, 2026.

A trust-type stablecoin is a digital token fully backed by reserves held in a trust and redeemable at par with a fiat currency. The FSA amended the Payment Services Act to reclassify qualifying foreign trust-type stablecoins as Electronic Payment Instruments, enabling them to run on Japan’s regulated payment rails once compliance is verified.

The framework requires issuers’ home jurisdictions to meet an equivalence standard covering licensing, auditing, anti-money-laundering controls and maintenance of same-currency reserves to limit exchange-rate risk. Domestic intermediaries — banks, crypto exchanges and other local payment providers — are responsible for confirming that foreign issuers meet those standards before offering services tied to the stablecoins inside Japan.

The regulation was published on May 19 and takes effect June 1. Until now many foreign-issued stablecoins faced regulatory friction in Japan, often being treated as securities or left in a gray area that prevented everyday payment uses such as point-of-sale transactions, remittances and settlement between firms. Market participants report several local firms preparing compliant services; SBI VC Trade has explored licensed offerings involving global stablecoins such as USDC.

In the United States, the Senate Banking Committee voted 15-9 to advance the Digital Asset Market Clarity Act, known as the CLARITY Act. The bill would clarify which federal agencies oversee different digital assets and includes a provision that broadly bars passive, deposit-like interest on payment stablecoins while permitting activity-based rewards for users.

Jeane Vidoni, chief executive of Penn Community Bank, urged lawmakers to close a perceived loophole and to ensure any prohibition on stablecoin interest applies to issuers, exchanges, affiliates and intermediaries that deliver equivalent economic returns.

Alex Thorn of Galaxy Digital estimated the bill’s chance of passage in 2026 at roughly 65% to 75%. Traders on Polymarket placed the probability at about 64%.

If foreign trust-type stablecoins meet Japan’s equivalence tests and pass domestic verification, they will be able to operate as Electronic Payment Instruments in Japan, enabling cross-border payments, remittances and tokenized settlement arrangements between firms. Regulators, market participants and corporate treasuries will monitor early implementations and verification processes after the June 1 start date.