A local financial body in Japan has said that the country’s new legislation that will allow investors to trade stablecoins like Tether (USDT) is scheduled to pass no later than June 2023 at the latest.

Japan’s Financial Services Agency (FSA) is working to remove the restriction on domestic distribution of stablecoins and has tentative plans to make this change before the end of the year for certain stablecoins.

The FSA spokesperson noted that the organization would only approve stablecoins that successfully pass individual inspections designed to ensure that such cryptocurrencies are protected from a user protection perspective.

The representative went on to say that other examples include international issuers in their own countries subject to identical restrictions in Japan, with underlying assets acceptably protected.

Furthermore, the authorities stressed that there is no way to know if major stablecoins like Tether (USDT) or USD Coin (USDC) would be allowed. This point was emphasized several times. According to the spokesperson, “FSA does not give any option to obtain such material before the decision is made.”

The new stablecoin laws that have been suggested for Japan are included in the proposed cabinet orders and cabinet office ordinances that are related to the change to the Payment Services Law of 2022.

The new regulations will be implemented in December 2022 and their main objectives are to establish the standards for electronic payment instruments and create the registration processes associated with them.

Official data indicates that the FSA will continue to take public input on changes to the Payment Services Act until January 31, 2023. An FSA spokeswoman said the specific date has not yet been agreed as the regulation is planned. to be published and implemented through the relevant processes once the public comment period ends.

The FSA said that the deadline for the application of the law will be in early June.

According to previous reports, the Diet of Japan approved a measure that will take effect in June 2022 and will ban the use of foreign stablecoins. The bill also requires stablecoin issuers to link their cryptocurrencies only to the Japanese yen or another legal denomination.

It would appear that several cryptocurrency firms have been negatively affected by the new regulations, as none of the 31 Japanese exchanges that are registered with the FSA have subsequently provided stablecoin trading. The legislation is scheduled to enter into force in 2023.

Due to the lackluster state of the cryptocurrency market in Japan, several prominent cryptocurrency exchanges, including Coinbase and Kraken, have recently suspended their operations there.