Crypto regulation in the world weekly digest #171
Japan's Financial Services Agency has launched a pilot program starting November 2025 involving the country’s three major banks — Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho Financial Group — to jointly issue a yen-backed stablecoin. This initiative is part of Japan's Payment Innovation Project (PIP), aiming to explore legal and operational frameworks for regulated stablecoin issuance in Japan. The pilot will test compliance under existing Japanese regulations and facilitate corporate client settlements using yen-pegged stablecoins, with a possible future introduction of dollar-pegged stablecoins. The FSA supports the project to enhance user convenience and improve corporate efficiency within Japan's financial ecosystem.
Stablecoins are legally recognized in Japan as a form of digital money under an amendment to the Payment Services Act passed in June 2023. A legal stablecoin must be pegged to the yen and guarantee holders the right to redeem each token at face value. Only licensed banks, trust companies, and money transfer agents are permitted to issue stablecoins in Japan. This excludes foreign-issued stablecoins like USDT and USDC as well as decentralized algorithmic stablecoins such as MakerDAO’s DAI from legal recognition.
The law, effective within the next year from mid-2023, aims to internalize stablecoin issuance within Japan, restricting foreign influence and enhancing regulatory control. From now, Japan’s FSA-backed pilot with major banks becomes a pioneering step aligned with its strict regulatory framework that licenses only domestic financial institutions to issue yen-pegged, fully redeemable stablecoins under Japanese law.
USA
Ripple has partnered with Mastercard, Gemini, and WebBank to pilot the use of RLUSD, Ripple's regulated U.S. dollar-backed stablecoin, for settling credit card transactions on the XRP Ledger. This initiative, announced at Ripple’s Swell 2025 event in November, aims to enable payments made with a Gemini-branded credit card to settle using RLUSD via the XRP Ledger, with WebBank (issuer of the Gemini credit card) handling settlements on Mastercard’s network.
The RLUSD stablecoin, launched in December 2024 under New York's Trust Charter, is fully backed by cash and cash equivalents and has already surpassed $1 billion in circulation. This marks one of the first times a regulated U.S. bank uses a public blockchain and stablecoin for fiat card payment settlements, aiming to bring faster, more efficient blockchain settlement to traditional credit card payment flows, reducing the settlement time from days to nearly instant, and lowering associated costs.
Mastercard highlights that this pilot is part of integrating regulated, open-loop stablecoin payments into its global payment network to support consumer choice and safety while exploring broader blockchain use cases. Pending regulatory approvals, the project will onboard RLUSD in the coming months, potentially setting a model for other card programs to adopt blockchain-based settlement mechanisms.
Ripple and Mastercard’s partnership to test RLUSD stablecoin payments is a significant step toward mainstream adoption of regulated stablecoins for credit card transactions, leveraging blockchain technology for faster, safer, and more cost-effective settlements on public ledgers.
The Brazilian government is actively overhauling its cryptocurrency compliance system to tighten control over the use of crypto by criminal organizations for illicit activities. This overhaul is part of a broader regulatory evolution under Brazil's Virtual Assets Law (BVAL, Law No. 14,478/22), which came into effect in June 2023, providing the legal framework for regulating crypto assets and virtual asset service providers (VASPs) in Brazil.
According to the plan, the mandatory registration and licensing of crypto service providers with the Central Bank of Brazil will be established, which supervises AML/KYC compliance and financial monitoring as part of a phased implementation plan finalized in 2025. Right now, crypto companies are being controlled by the CVM, the analogue of the SEC in the USA.
Implementation of enhanced AML programs focused on preventing money laundering and terrorist financing, with risk-based controls adapted to business profiles and emerging threats is also in a plan as well as stringent Know Your Customer requirements.
Additionally, Brazil is aligning its regulatory approach with international best practices and is integrating crypto AML efforts within broader financial crime prevention initiatives. The government’s regulatory agenda for 2025-2026 emphasizes transparency, consumer protection, and curbing misuse of digital assets by criminal groups. This overhaul also dovetails with Brazil’s ongoing fintech initiatives such as the Drex platform pilot, taking a comprehensive approach to digital asset oversight.
News from other countries:
- FTX has withdrawn its controversial motion to restrict payments and classify customer claims from 44 to 49 countries (including Russia, China, Ukraine, Pakistan, and Saudi Arabia) as «restricted jurisdictions». This plan would have frozen or forfeited claims due to regulatory difficulties in these countries. The affected claims totaled around $800 million, representing about 5% of the total $16 billion estimated potential distributions, with China alone accounting for $380 million (approximately 82% of the «problematic» claims).
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