The financial services Agency (FSA) of Japan announced that stabilini not meet the definition of “virtual currency” in the law on payment services. Therefore, the turnover of stable cryptocurrency should be regulated differently.
Under the current law on payment services, cryptocurrencies are considered to be means of payment and therefore are not subject to value added tax (VAT). Moreover, the blockchain startups, which produce digital assets are not required to obtain a license, instead, companies are allowed to issue “payment instruments”.
According to the FSA, stabilini should be considered “prepaid payment instrument”, it means to release a stable of digital assets the company needs to register as “Issuer of prepaid payment instruments” or “payment Provider”. Status of prepaid payment tool also allows you to process transactions in stalking up to $9.000, without the need for a banking license.
For transactions up to $9.000 private and legal entity must register as a provider of payment services, if the transfer amount exceeds $9.000, it is necessary to obtain a banking license. Thus, the turnover of the stable cryptocurrencies will be regulated under the two regulations depending on the volume of money transfer:
• To $9.000 – law on payment services.
• Over $9.000 – law on banking services.