WebX 2025 Conference Roundtable Discussion: Stablecoin Regulation and Application in the United States and Japan

Compiled by Golden Finance, the WebX 2025 conference was held in Tokyo, Japan, on August 25th. Heath Tarbert, former Chairman of the U.S. CFTC and Chief Legal Officer and Head of Corporate Affairs at Circle, and Katayama Satsuki, a Liberal Democratic Party senator and Chairperson of the Senate Budget Committee, participated in a roundtable discussion focused on the regulation and application of stablecoins. During the roundtable, Katayama expressed caution regarding central bank digital currencies (CBDCs) and her belief that stablecoins are a key entry point for the widespread adoption of the crypto industry. She noted that international concerns surround the privacy and surveillance risks of CBDCs, while domestic voices question their decentralized nature. The House of Representatives has even proposed a ban on such exploration. Currently, CBDCs in Japan are still in the research phase and have not yet entered the commercial stage. Japan, however, prefers to prioritize the development of stablecoins. Young people in Japan are currently the primary holders of crypto assets. She noted that Japan is promoting a reclassification of cryptocurrencies, planning to move them from "miscellaneous income" to the Financial Instruments and Exchange Act, reducing the maximum tax rate of 55% to 20% (aligned with the US). This plan currently requires multi-party consultations, with the goal of finalizing the plan by the end of the year. If the cryptocurrency tax rate adjustment is implemented, the use of stablecoins in daily transactions is likely to become more widespread, while CBDCs are not a priority in the short term. She also revealed that Japan has collaborated with institutions such as the European Central Bank on CBDC research, but progress has been slow. Future directions will be determined based on market demand and technological maturity. Heath Tarbert noted that the US regulatory environment for cryptocurrencies has undergone a significant shift, from previously stringent to supportive. The passage of the Genius Act is significant, effectively equating stablecoins to cash for the first time, providing long-awaited regulatory clarity for the industry and laying the foundation for stablecoins to be backed 1:1 with high-quality liquid assets. However, the US still has much work to do in terms of digital asset regulation, such as clarifying the classification of other digital assets and improving market structure legislation such as custody services and exchange regulations. Furthermore, the implementation details of the Genius Act have yet to be finalized. Regarding stablecoins, Heath stated that they have a wide range of applications. Besides enabling efficient entry and exit of crypto assets, they can also serve as a reliable dollar savings tool for citizens in non-G20 countries, reducing cross-border remittance costs, which can be as high as 6%-7%. They can also streamline cross-border transaction processes for businesses, enabling instant settlement and avoiding foreign exchange fees. The Circle payment network uses USDC to connect global financial institutions, setting a precedent for efficient exchange between different currencies. The US maintains a cautious stance on central bank digital currencies. Heath noted that many in the US are concerned about the privacy and surveillance risks of CBDCs. The Genius Act effectively prohibits the Federal Reserve from launching a CBDC in the near future, and the dollar on the blockchain is more likely to exist in the form of a stablecoin in the future. Golden Finance has summarized the key points discussed below for readers' enjoyment. Moderator: We're going to talk about the current state of cryptocurrency regulation and stablecoin adoption in the United States and Japan. Let's start with a macro perspective, looking at the latest developments in cryptocurrency regulation. If this panel discussion were held a year ago, it would have been a completely different conversation. So much has changed. So, Heath Tarbert, let's start by outlining your perspective on the current state of cryptocurrency regulation in the United States. What's the current situation? How is progress being made? What are the bright spots? What needs improvement? How would you summarize the current situation? Heath Tarbert: As you said, it's been a sea change. I think many Americans felt that just a year or two ago, with the outcome of the presidential election and the shifting views in legislatures on both sides of the aisle, there was actually a war going on in the cryptocurrency space. Now we have a very pro-crypto government that's working to provide the regulatory clarity that the industry has been craving and needed for years. Japan has been doing this for years and has established the relevant system. So, the United States lagged behind with the passage of the Genius Act. We'll talk about this in more detail later, but this was a watershed moment, truly equating stablecoins with cash for the first time and providing robust regulation. There's still a lot of work to do, and we don't have comprehensive market structure regulation yet, but we're on track. Moderator: Thank you. Ms. Katayama, how would you describe the current state of cryptocurrency regulation in Japan? Katayama Satsuki: Before researching the situation in Japan, I traveled to Washington, D.C., for President Trump's inauguration in January of this year. There, I introduced SEC Chairman Adkins. They firmly believe that the direction of cryptocurrency development in the United States will not change, not only in investment but also in payment settlement. They are rapidly preparing the Genius Act. In Japan, there's the Japanese yen stablecoin JPYC. The business was only registered last week, but we already have the relevant legislation, or rather, regulations for products and activities. But we need to consider more. This is very important. If I understand correctly, changing the classification could lower the tax rate. Exactly how many accounts are creating assets in Japan? Did you know? We already have 12 video accounts. That's more than the playback accounts, and most of them are younger generations who are using it now. They're willing to pay for it. But currently, it's classified as miscellaneous income, with a 55% income tax rate. So no one can sell it. If it's classified as a financial instrument asset, sales and capital gains will remain the same, but everything else will be reduced to about 20%, roughly in line with the US. That's the key. Host: Yeah, that's really important for those who haven't been paying attention. Katayama Satsuki: Basically, the current situation in Japan is that the tax rate can be as high as 55%. Moving cryptocurrencies from the Payment Services Act to the Financial Instruments and Exchange Act could reduce the tax rate to 20%, which is more consistent with the stock tax rate. We expect this change to happen within the next year or two. We must take control of the Financial Services Commission by the end of the year. I've been chairing the Commission, and it has proposed this direction. The Cabinet is very firm on this decision, but we've lost our majority in Japanese politics. We have to negotiate with other political parties, which will take some time and make things a little more complicated. However, several other parties agree with our idea. So normally, we'd have to finalize the final plan by December. Host: Thank you. That's really important. We just talked about a very big challenge facing Japan, which is high tax rates. I don't want to dwell too much on the exciting things happening in the US crypto industry right now. But there are obviously some challenges, at least I have a lot of perspective on that, but I wanted to hear your thoughts, Heath. What are some of the remaining regulatory challenges you see in the US? Or are there any issues you see that worry you, or are there things that need to be done? Heath Tarbert: Yes. First, let me emphasize the good news: For the first time in recent history, the US is truly embracing digital assets and cryptocurrencies, not just as an additional asset class, a new asset class, but as the future of the financial system itself, right? The US has realized that this is not just a fact, it fundamentally changes the financial system, just like the internet fundamentally changed communications, right? Because that's what we're ultimately seeing. So what's next? Stablecoin legislation is crucial because, in our view, it provides the base monetary layer for the financial system on the new internet. But we're not yet clear on how other digital assets should be regulated. What are securities? What are commodities? What about custodial services? What about exchanges? How should these assets be listed? How should they be treated? All of these rules haven't been written yet, and they haven't been legislated yet. So right now in the US, we're focused on market structure legislation, which we hope to pass by the end of the year. Meanwhile, even the Genius Act has been passed, but it hasn't been implemented yet. So, under the Genius Act, regulators still need to develop a lot of rules. That's where we are right now. But as we said, the situation has shifted significantly, and we're moving in the right direction. Moderator: Yes, you make a good point. So, regulatory clarity has long been a pain point in the US. I think Japan is actually leading the way in this area because you might not agree with all of their regulations, but they are very clear and have been for a long time. So what's holding it back with the CLARITY Act? Because there's a bill that's supposed to address these issues, but it still hasn't passed. Heath Tarbert: The good news is that the bill has passed the House and is now being considered by the Senate. So we're hopeful that the Senate will have some input on the CLARITY Act. They can pass their own version as soon as possible. But right now, there seems to be widespread agreement that we need regulatory clarity. The United States has had many great leaders, like the ones who sat next to me years ago, who saw the promise of this technology and worked on it. But in the United States, we've had an environment where people were more willing to take people to court than actually come up with some sensible rules. Now we're finally seeing that happen, but we're still waiting for the Senate to act. Host: So Japan actually regulated stablecoins long before the United States. Japan was probably the first major economy in the world to regulate stablecoins. I've always said that American policymakers should have learned from Japan's experience much sooner. Ms. Katayama, I'd like to hear your thoughts. What do you think the majority of Japanese politicians think about cryptocurrencies right now? My impression is that some are very supportive of cryptocurrencies, but others in Japanese politics don't have such strong opinions. Is that correct? There is actually opposition. Katayama Satsuki: You're absolutely right. I don't come from the tech world myself. I work in law, regulation, and administration, so I can't understand code. We know these things exist. I have to advocate for them, and we've been discussing most of them. The other problem is that they're talking about things we don't understand. But in order to pass legislation, we have to pass it everywhere. Public opinion is very important. Now is the time to do that. To achieve this, stablecoins are very good and stable. They're a way to improve payments, management, and efficiency. Host: Of course. Let's move on to stablecoins. That's a perfect transition. So, Heath, let's go ahead, since we're not in the US right now. Could you please briefly summarize what the Genius Act actually did and what it accomplished? And I'm really interested in what's left to do and what the challenges are. Just give me a rough outline; I think no one could explain it better than you. Heath Tarbert: Absolutely. First, you asked how Japan can learn from the US, but I would also say that the US is also learning from Japan. Clearly, while not every Japanese lawmaker may understand or appreciate cryptocurrency, they haven't ignored it. They've encouraged action and progress. I think that's really important. So when the Genius Act is discussed in the US, we always bring up Japan, saying that USDC is a stablecoin pegged to the US dollar, but it has clearer regulations in Japan than in the US. So, the good news for your question is that the Genius Act passed last month. So what does the Genius Act do? Essentially, it legally establishes a "reserve" system for stablecoin issuance, a one-to-one reserve requirement. Therefore, every stablecoin issued under the Genius Act must be backed one-to-one by high-quality liquid assets. It can't be algorithms, other types of assets, or anything like that; every dollar must be backed by one dollar of safe assets like Treasury bonds. The act also mandates transparency and reporting of reserves. As a stablecoin holder, you can review various documents on the website to verify that there is indeed a one-to-one reserve. Furthermore, it requires third-party audits and testing to verify that these assets are indeed backed. Finally, it requires some form of prudential oversight. Circle already implemented all of these elements to some extent on its own before the Genius Act was enacted, but we actively participated in its development. So it aligns with international standards. There's another very important aspect of the Genius Act, which relates to the international recognition my colleague just mentioned. If a stablecoin regulatory regime outside the US has very similar rules and regulations, and the US government recognizes them, then that stablecoin can enter the US. So this is one way for Japan's system to be recognized in the US, just as hopefully one day Japan will recognize the Genius Act. Host: Okay, that's a great summary. I have some follow-up questions, but I wanted to quickly return to the topic of Japan, because I'd like to hear your thoughts, Ms. Katayama, on the current state of stablecoin regulation in Japan. My understanding is that Japan has received a lot of praise for its early stablecoin regulation, but it also faces some challenges. As you yourself said, they finally have a yen stablecoin, but it took quite a while. My understanding is that there are some challenges in getting companies to issue stablecoins. I just wanted to get your perspective on whether you think there are difficulties in getting more companies to issue stablecoins, or how you view the current state of stablecoin issuance in Japan. Katayama Satsuki: As you mentioned, some difficulties have arisen, so we need to consider warrants, which have already been strengthened. Take the US monetary policy last year as an example. They intended to expand repos to include short-term US Treasury bonds, with a maximum of 55 days. These are the main rules in the US (I believe). When we established the regulations in 2017, the PayPal payment limit was $110,000, which was a small amount they should have. But the situation may be different now. In Europe, it's reportedly €10,000. However, in order to expand the use of stablecoins and allow every business to benefit from them, $10,000 is a reasonable amount in the international B2B sector. The key is how to ensure people's confidence in stablecoins. In this area, a plan is necessary. We must review all project activities and address these issues. Know your customer (KYC) and other matters must be fully prepared to weather the most adverse periods. Host: Of course, that's a big challenge. I'm just curious, are there other areas where you feel the Japanese and their regulatory system are a bit too strict? Katayama Satsuki: You think so, that's the feeling, I have to admit, because so far we haven't had the kind of industry voice that can really leverage B2B as a defender. But we don't have to worry about that. It will definitely become a defender. And right now, even with SWIFT, it takes time and money. It's inconvenient. So maybe here, among these voices, we need to change that and not just stay at the ceiling and do it like the US. Heath Tarbert: Yes. Thank you for your candid and important comments. Obviously, we take the Japanese system very seriously and seem to be fully complying with it. But as you pointed out, the transaction limit is 1 billion yen, which means that in practice, you can only send $70,000 to $10,000 in a single transaction. Host: But just to clarify, you can always send money, right? It seems not. Heath Tarbert: Yes, but if you're a business and someone's buying, let's say you're a Japanese car manufacturer and you want to be paid in a stablecoin for goods or buy parts or something like that, you want to be able to do that seamlessly with the transaction limit at that level. And as you said, in many ways, this kind of hinders the growth of the B2B enterprise user base. And then you're put in a situation where you're kind of playing tricks and saying, "Okay, I still owe you 87 million yen. I'm going to do 87 or 88 transactions like that." And I think that perhaps puts Japan in a slightly weaker position when competing with places like the EU, which has pretty strict regulations and doesn't have these interesting [policies]. Host: When do you think the amendment will happen? What are your thoughts? Is it likely? Katayama Satsuki: We can still do something without changing the law itself. That means it doesn't have to go through Congress, but there have to be some means. Host: It'll be very quick, but it's very interesting. Let's try to illustrate this in snippets, because this is a big question about stablecoins. Heath, starting with you, what do you think are the typical use cases for stablecoins, not just Circle? In general, what are some typical use cases for stablecoins? Heath Tarbert: Obviously, the first use case that comes to mind for everyone here is probably buying and selling digital assets. On exchanges, you can use stablecoins to buy and sell digital assets more quickly and flexibly. However, it's important for policymakers to recognize that stablecoins can provide a store of value for those who want to hold US dollars, especially in countries with unreliable central banks, but we're talking about countries outside the G20. Many people want to store a portion of their savings in US dollar stablecoins because US-issued dollar stablecoins are trustworthy and transparent, providing a valuable asset. Cross-border remittances currently cost around 6% to 7% to send money overseas, depending on the region. Using stablecoins, however, can be done securely, reliably, and seamlessly, just like sending an email. Furthermore, there are many commercial use cases. For example, if a Japanese company wants to sell products to Africa, they might not be paid for the goods—they might ship but not receive the money, or they might have to wait five days for the transaction to complete. Using stablecoins, however, can be almost instantaneous and avoid all foreign exchange fees. Essentially, any currency exchange, especially one involving cross-border transactions, can be enhanced, in my opinion, by using stablecoins, making it more efficient, cheaper, and faster. Host: Thank you! Ms. Katayama, what are the use cases for stablecoins in Japan? In your opinion, where can stablecoins be used? Katayama Satsuki: That's a good point. Maybe I'll talk to them about it. I started a study group after returning to Japan. First, it was among those who agreed to discuss it, then it was joined normally, and then the Japan Bankers Association joined. We have a financial sample, etc., based on your foundation. So I think in this historic event, we should include everyone. Heath Tarbert: We've discussed current use cases, but how many of you here are developers or work with developers? Yes, someone finally raised their hand. Don't be shy. What really excites me is the emerging use cases of you internet platform companies. So we encourage developers like you. You're going to come up with clever ways to embed stablecoins into your products and companies, building on some of the infrastructure that companies like Circle are building. That's exciting to me in a lot of ways. We're thinking about the intersection of AI, right? There might be a scenario in the future where we have dynamic payment methods, AI agents interacting with each other. If they're going to transact, what would be the ideal payment method between them? Most likely, stablecoins. So what this means is that we don't even know all the applications for stablecoins yet, and that's exactly my point, because many of you will be inventing them. Moderator: But if I just wanted to ask you specifically, because USDC is really pioneering in Japan, what specific use cases do you see for stablecoins in Japan? Because some people are skeptical and say they don't know what the real use cases are for stablecoins. So I'd love to know your perspective. Heath Tarbert: Japan. So I think any particular cross-border payment circle has a new application called the Circle Payment Network, which is a way to connect financial institutions and other payment processing companies around the world. So people can transfer money—for example, if you pay in Japanese yen, it'll be converted to Brazilian reals on the other side. We can do this with USDC. By connecting banks and financial institutions around the world in a stablecoin layer, we can conduct foreign exchange transactions at a lower cost and with greater efficiency. This is just one practical use case in the real world. Host: I want to quickly talk about central bank digital currencies (CBDCs). Do we really need them? I'm talking about stablecoins. Katayama Satsuki: That's the key point. When I visited Washington, I was very surprised. I expected 20 or 25 people, but there were many. Many of them asked me a key question. Most people tell me the US House of Representatives bans any form of central bank digital currency, which I think is a good idea, as it's still undecided. Perhaps we won't reduce the number of central bank digital currencies, but their role could be completely different. Perhaps, I really don't know. But we won't announce it in our commercial operations. The young investors I mentioned are the main demographic opening crypto accounts in Japan, many of whom come from the medical industry. They get information from diet or fashion icons and deposit money into their accounts, even if the amounts are small, but they do have this enthusiasm. So I think from the outset, after we lower our tax rate to 20%, they'll be able to access services and then transition to leveraging stablecoins, rather than returning their money to banks. I think this type of exchange or settlement between investments will become a thing of the past for ordinary or broad users, even if the amounts may be small. Heath Tarbert: Each country must decide for itself whether to use a central bank digital currency, and as you said, there are many options. Many Western countries, including the United States, regardless of their location in the world, have chosen to avoid adopting central bank digital currencies due to concerns about privacy, civil rights, surveillance, and other issues. Our stablecoin, USDC, is designed to work in conjunction with other stablecoins or central bank digital currencies, but in the United States, they have made a clear decision. The Genius Act effectively prohibits the Federal Reserve from using a central bank digital currency in the near and even longer term. The dollar on the blockchain in the future is more likely to exist in the form of a stablecoin. Host: I think this is a perfect way to end. Time's almost up, but thank you very much. I've learned a lot from this conversation. Katayama Satsuki: It's great that we all pursue a common goal in this world. Heath Tarbert: Let's end with that. Thank you very much.