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

Organization: Golden Finance

On August 25, the WebX 2025 conference was held in Tokyo, Japan. Former Chairman of the CFTC, Heath Tarbert, who is also the Chief Legal Officer and Head of Corporate Affairs at Circle, along with Katayama Satsuki, a member of the Liberal Democratic Party and Chairman of the Senate Budget Committee, participated in a roundtable discussion focusing on the regulation and application of stablecoins.

During the roundtable discussion, Katayama Satsuki clearly expressed a cautious attitude towards central bank digital currencies (CBDC) and her belief that stablecoins are an important entry point for the popularization of the crypto industry. She pointed out that there are concerns in the international community about privacy and monitoring risks associated with CBDCs, and there are voices within Japan questioning their decentralized attributes. The House of Representatives even proposed banning related explorations. Currently, CBDCs in Japan are still in the research phase and have not yet entered the commercial promotion stage. Japan is more inclined to prioritize the development of stablecoins. The current young demographic in Japan is the main holder of crypto assets. She pointed out that Japan is pushing for adjustments in cryptocurrency classification, planning to shift it from "miscellaneous income" into the regulatory scope of the Financial Instruments and Exchange Act, aiming to reduce the maximum tax rate from 55% to 20% (in line with the United States). Currently, it needs to negotiate with multiple parties, striving to finalize the plan by the end of the year. If the adjustment of cryptocurrency tax rates is implemented, the application of stablecoins in daily transactions may become more widespread, while CBDCs are not a priority in the short term. She also revealed that Japan had previously collaborated with institutions like the European Central Bank to study CBDCs, but progress has been slow, and future directions will be determined based on market demand and technological maturity.

Heath Tarbert pointed out that the regulatory environment for cryptocurrencies in the United States has undergone a significant shift from past strictness to support. The passage of the "Genius Act" is highly significant as it equates stablecoins with cash for the first time, bringing much-anticipated regulatory clarity to the industry and laying the foundation for stablecoins to be backed by high-quality liquid assets at a 1:1 reserve ratio. However, there is still much work to be done in the U.S. regarding digital asset regulation, such as clarifying the classification of other digital assets and improving market structure legislation for custody services and exchange rules, and the implementation details of the "Genius Act" have yet to be finalized. Speaking of stablecoins, Heath stated that their application scenarios are wide-ranging. In addition to enabling efficient entry and exit in cryptocurrency trading, they can also serve as a reliable dollar savings tool for citizens of non-G20 countries, reducing cross-border remittance costs by up to 6%-7%, and optimizing corporate cross-border transaction processes for instant settlements while avoiding foreign exchange fees. The Circle payment network uses USDC to connect global financial institutions, providing an example of efficient exchanges between different currencies. Regarding central bank digital currencies, the U.S. takes a cautious stance. Heath mentioned that many people in the U.S. are concerned about the privacy and surveillance risks associated with CBDCs, and the "Genius Act" effectively prohibits the Federal Reserve from launching a CBDC in the near future; in the future, the dollar on the blockchain is more likely to exist in the form of stablecoins.

Golden Finance will mainly discuss the content organized as follows for the readers.

Host: Next, we will discuss the situation regarding cryptocurrency regulation and the promotion of stablecoins in the United States and Japan.

Let's start from a macro perspective. Let's look at the latest developments in cryptocurrency regulation. If this group discussion had taken place a year ago, it would have been a completely different conversation. So much has changed since then. So, Heath Tarbert, let's describe from a general perspective how you view the current state of cryptocurrency regulation in the United States. What is the current situation? What progress has been made? What are the highlights? What still needs improvement? How would you summarize the current situation?

Heath Tarbert: As you mentioned, this is indeed a seismic shift. I believe many Americans think that just a year or two ago, with the changes in the presidential election results and the shifting perspectives in the bipartisan legislative body, a war has actually erupted in the cryptocurrency space.

Today we have a government that strongly supports cryptocurrencies, working to provide the regulatory clarity that the industry has long desired and needed. Japan has been deeply involved in this area for many years and has established relevant systems. Therefore, the U.S. is lagging behind in the passage of the Genius Act. We will discuss this in more detail later; this is a watershed moment that truly equates stablecoins with cash and provides sound regulation. However, there is still a lot of work to be done, and we do not yet have comprehensive market structure regulation, but we are on the right track.

Host: Thank you. Ms. Katayama, how would you describe the current state of cryptocurrency regulation in Japan?

Katsuyama Satsuki: Before studying the situation in Japan, I attended President Trump's inauguration in Washington, D.C. this January. There, I introduced SEC Chairman Adkins. They firmly believe that the direction of cryptocurrency development in the U.S. will not change, both in terms of investment and in payment settlements. They are rapidly preparing the Genius Act. In Japan, there is a yen stablecoin, JPYC. This business was registered only last week, but we already have a relevant legislative framework, or regulatory provisions targeting products and activities. However, we must consider more.

This point is very important. If I understand correctly, changing categories may reduce the tax rate.

Exactly how many accounts are there in Japan that are creating assets? Do you know? We already have 12 video accounts. That's more than play accounts, and most of them are from the younger generation who are now using it. They are willing to pay for the service. However, at the moment, it is classified as miscellaneous income, with an income tax rate of 55%. So no one can sell it. If it is classified as a financial instrument asset, the sales and capital gains will be the same as before, but the other parts will drop to about 20%, roughly similar to the United States. That’s the key.

Host: Yes, this is indeed very important for those who do not pay attention.

Katayama Satsuki: Basically, the current situation in Japan is that the tax rate can be as high as 55%. Transferring cryptocurrency from the classification under the Payment Services Act to the Financial Instruments and Exchange Act may reduce the tax rate to 20%, which is more consistent with stock tax rates. This change is expected to be implemented within the next year or two.

We must take control of the Financial Services Committee before the end of the year. I have always been the chairman of the Financial Services Committee, which has proposed this direction, and the cabinet is very firm on this decision, but in the Japanese political arena, we have lost the majority of seats.

We must negotiate with other political parties, which will take some time and may become slightly more complicated. However, several other parties also agree with our ideas. So usually, we need to finalize the final plan before December.

Host: Thank you. This is really important. We just discussed a very big challenge facing Japan, which is high tax rates. I don't want to talk too much about the exciting things happening in the U.S. cryptocurrency industry at this moment. But obviously, there are still some challenges, and at least I have a lot of views on this aspect, but I would like to hear your opinions, Heath. What do you think are the remaining challenges in regulation for the U.S.? Or have you seen any issues that concern you, or are there still things to be done?

Heath Tarbert: Yes. First, I want to emphasize some good news: for the first time in modern American history, there is a real embrace of digital assets and cryptocurrencies, not just as an additional asset class, a new asset class, but as what we once viewed as the future of the financial system itself, right?

The United States has realized that this is not just a fact; it fundamentally changes the financial system, just as the Internet fundamentally changed communication, right? Because that's what we ultimately see.

So what should we do next? The legislation on stablecoins is crucial because our view is that it provides the foundational currency layer for the new financial system on the internet. However, we are currently unclear on how other digital assets should be regulated. What constitutes a security, and what constitutes a commodity? What about custody services? What about exchanges? How should these assets be listed? How should they be treated? All of these rules have yet to be established and have not yet been legislated. So currently in the U.S., we are focusing on legislation regarding market structure, hoping to pass it by the end of the year. Meanwhile, even though the Genius Act has been passed, it has not yet been implemented. Therefore, under the Genius Act, regulators still need to establish many rules.

This is our current situation. But as we said, the situation has undergone a significant change, and we are moving in the right direction.

Host: Yes, your point is very good. So, the issue of regulatory transparency has long been a pain point in the United States. I think Japan is actually ahead in this regard, because you may not agree with all of Japan's regulatory provisions, but they are indeed very clear and have been for a long time. So, what exactly is hindering the "CLARITY Act"? Because there is indeed a bill that was supposed to address these issues but has yet to be passed.

Heath Tarbert: The good news is that this bill has passed the House of Representatives and is now under consideration by the Senate. Therefore, we hope that the Senate can provide some feedback on the CLARITY Act. They can pass their own version as soon as possible. However, it seems that there is a general consensus that we need regulatory transparency. The United States has many great leaders, just like those who sat next to me years ago, who saw the potential of this technology and actively worked on it. But in the U.S., we have found ourselves in an environment where people are more inclined to sue each other rather than to articulate some reasonable rules.

Now we have finally seen this scene happen, but we are still waiting for the Senate to take action.

Host: So Japan actually regulated stablecoins even before the United States. Japan may be the world's first major economy to regulate stablecoins. I've always said that American policymakers should have learned from Japan's experience much earlier. Ms. Katayama, I would like to hear your thoughts. What do you think is the attitude of most Japanese politicians towards cryptocurrencies now? My impression is that some people are very supportive of cryptocurrencies, but others in the Japanese political scene do not have such strong opinions on this matter. Is my impression correct? There are indeed opposing views.

Katayama Satsuki: You are absolutely right, because I personally do not come from a technology background. I work in law, regulations, and administrative management, so I cannot understand code. We know that such things exist. I must advocate that we have been discussing most matters. Another issue is that they are talking about things we do not understand. But in order to legislate, we must pass it everywhere. Public opinion is very important. It is time to do this. To achieve this, stablecoins are very good and operate stably. This is a way of payment, management, and efficiency enhancement.

Host: Of course. Let's continue talking about stablecoins. This is truly a perfect transition. So Heath, please continue to speak, after all, we're not in the United States right now. Could you briefly summarize what the "Genius Act" has accomplished and what achievements it has made? Also, what I am really interested in is what work still needs to be done and what challenges remain. Just give a brief overview, I think no one knows better than you.

Heath Tarbert: Of course. First, you asked how Japan can learn from the United States, but I would say that the United States is also learning from Japan. It’s clear that perhaps not every Japanese legislator understands and appreciates cryptocurrency, but they have not ignored this technology. They encourage action and progress. I think that is very important. So when the Genius Act is discussed in the United States, we always mention Japan, saying that USDC is a stablecoin pegged to the US dollar, but in Japan, it has clearer regulatory guidelines than in the United States.

So regarding your question, the good news is that the "Genius Act" was passed last month. So what is the role of the "Genius Act"? Essentially, it legally establishes the "reserve fund" system for stablecoin issuance, which is a one-to-one reserve system. Therefore, every stablecoin issued under the "Genius Act" must have a one-to-one backing of high-quality liquid assets. It cannot be backed by algorithms, other types of assets, or anything similar; every dollar must be backed by one dollar's worth of safe assets like government bonds. The Act also stipulates that transparency must be ensured, and there should be reports on the reserves. As a stablecoin holder, you can view various documents on the website to confirm that there is indeed a one-to-one reserve. Additionally, it requires third parties to audit and test whether these assets genuinely provide support. Finally, it mandates some form of prudent regulation. All these elements were somewhat self-implemented by Circle before the "Genius Act" was introduced, but we actively participated in the drafting process of the "Genius Act."

So it is in line with international standards. It is very consistent with international standards. Another very important aspect of the "Genius Act" relates to the international recognition mentioned by my colleague just now. If there is a stablecoin regulatory system outside the United States that has very similar rules and regulations, and the U.S. government can recognize this, then that stablecoin can enter the United States. So this is a way for Japan's system to gain recognition in the U.S., just like hoping that one day Japan will also recognize the "Genius Act."

Host: Alright, that was a great summary. I have a few follow-up questions, but I want to quickly return to the topic of Japan, as I would like to hear your thoughts, Ms. Katayama, on the current state of stablecoin regulation in Japan. My understanding is that Japan has received significant praise for its early stablecoin regulatory efforts, but at the same time, it also faces some challenges. As you mentioned, we finally have a yen-backed stablecoin, but it took quite a long time. My understanding is that there are some challenges with corporate issuance of stablecoins. I just want to hear your perspective, do you think there are difficulties in encouraging more companies to issue stablecoins, or how do you view the current state of stablecoin issuance in Japan?

Katsuragi Satsuki: As you mentioned, there have been some difficulties, so we need to consider the warrants, which have been enhanced. Take last year's monetary policy in the United States as an example. They intend to expand the scope of repurchases to include short-term U.S. Treasury bonds. The maximum is 55 days, and these are the main rules of the United States (I believe it is the U.S.).

When we established regulations in 2017, the PayPal payment limit was $110,000, which was meant to be a small amount for them. However, the situation may be different now; in Europe, it is said to be €10,000. But to expand the use of stablecoins and allow every business to benefit from it, $10,000 is reasonable in the international B2B sector. The key is how to ensure people's confidence in stablecoins. There must be a solution in this area. We need to examine all project activities and address these issues, and KYC matters must be well-prepared to get through the most adverse times.

Host: Of course, this is indeed a big challenge. I'm just curious, are there other aspects that make you feel the Japanese people and the Japanese regulatory system are a bit too strict?

Katsuragi Satsuki: If you think so, then that must be the feeling. I have to admit that so far, we haven't had an industry voice that can truly utilize B2B as a defender. But we don't have to worry about that. It will definitely become a defender. And now, even with SWIFT, it takes time and money. It's quite inconvenient. So perhaps here, among these voices, we need to change this situation; we can't just stop at the ceiling, we also need to do it like the United States.

Heath Tarbert: Yes. Thank you for expressing such important opinions candidly. Clearly, we value the Japanese system very much, and it seems we comply completely. But as you pointed out, the trading limit is 1 billion yen, which means that in reality, a single transaction can only remit 70,000 to 100,000 dollars.

Host: But it needs to be clarified that you can keep remitting money, right? It seems like you can't.

Heath Tarbert: Yes, but if you are a business and someone is purchasing, for example, if you are a Japanese automaker and you want to receive payments in stablecoins or buy parts, you want to conduct seamless transactions under the condition that the transaction limits reach this level. As you mentioned, in many ways, this somewhat hinders the development of the B2B user base. Then you find yourself in a situation where you are kind of playing tricks, saying, well, I still owe you 87 million yen. I intend to make 87 or 88 similar transactions. And I think this might put Japan at a slight disadvantage when competing with places like the EU, where regulation is quite strict and there aren't as many interesting (policies).

Host: When do you think the revisions will take place? What do you think? Is there a high possibility of revisions?

Kiyama Satsuki: There are still things we can do without modifying the law itself. This means we can do it without going through Congress, but we need some means to do so.

Host: The results will come soon, but it's quite interesting. Let's try to elaborate with segments, as this is a big question about stablecoins. Heath, let's start with you, what do you think are the typical use cases for stablecoins, not limited to Circle? Overall, what typical stablecoin application scenarios do you see?

Heath Tarbert: Obviously, the first use that everyone here might think of is buying and selling digital assets. At the exchange, you can use stablecoins to buy and sell digital assets more quickly and flexibly.

However, it is important for policymakers to recognize that stablecoins can provide a means of storing value for those who wish to hold US dollars, especially in countries where central banks are unreliable, but we are talking about countries outside of the G20. Many people hope to store a portion of their savings in dollar stablecoins because US-issued dollar stablecoins are trustworthy and transparent, thus becoming a form of value. For cross-border remittances, the current cost of sending money overseas is about 6% to 7%, depending on the region. Using stablecoins for remittances can be done safely, reliably, and seamlessly, just like sending an email. Furthermore, there are many commercial application scenarios. For example, if a Japanese company wants to sell products to Africa, they may not receive payment immediately, meaning they shipped the goods but may not receive the money, or they have to wait 5 days to complete the transaction, whereas using stablecoins can almost complete the transaction instantly and avoid all foreign exchange fees.

Basically, any currency exchange, especially involving cross-border transactions, in my view, can be enhanced by using stablecoins, making it more efficient, cheaper, and faster.

Host: Thank you! Ms. Katayama, what are the application scenarios for stablecoins in Japan? In your opinion, what aspects can stablecoins be used for?

Katayama Satsuki: That's a good point. Perhaps I will talk to them. After returning to my country, I established a study group myself. But the first time was among a group of people who agreed to communicate, then it was about normal participation, followed by the Japan Bankers Association joining. We have a financial sample, etc., based on your foundation. So I believe that in this historic event, we need to include everyone.

Heath Tarbert: We have explored the current application scenarios, but how many people here are developers or work with developers?

Yes, finally someone raised their hand, don’t be shy. What truly excites me are the emerging cases from you internet platform companies. So we encourage developers like you. You will come up with clever ways to embed stablecoins into your products and companies, built on some infrastructure created by companies like Circle. This excites me in many ways. We think about the intersection of artificial intelligence, right? In the future, there could be a scenario where we have vibrant payment methods, with AI agents interacting with each other. If they were to transact, what would be their ideal payment method? It would most likely be stablecoins.

So this means that we don't even know all the applications of stablecoins, which is exactly my point, because many of you will go on to invent them.

Host: However, if I just want to specifically ask you, because USDC has indeed pioneered in Japan, what specific use cases for stablecoins do you think exist in Japan? Some people are skeptical and say they don't know what the actual application scenarios for stablecoins are. So I am very interested in knowing your opinion.

Heath Tarbert: Japan. So I think there is a new application called "Circle Payment Network" for any special cross-border payment circle, which is a way to connect financial institutions and other payment processing companies from around the world. So people can make transfers, for example, if you pay in yen, the money will turn into Brazilian real when it arrives on the other side.

We can achieve this through USDC. By matching banks and financial institutions around the world on the stablecoin layer, we are able to conduct foreign exchange transactions at lower costs and with higher efficiency. This is just one practical use case in the real world.

Host: I want to quickly talk about Central Bank Digital Currency (CBDC). Do we really need them? I'm referring to stablecoins.

Katayama Satsuki: This is the key point. When I visited Washington, I was very, very surprised. I thought there would be 20 or 25 people, but it turned out there were a lot of people. Many of them asked me this key question. Most people told me that the U.S. House of Representatives prohibits any form of central bank digital currency, and I think this is a good idea because it hasn't been finalized yet.

Perhaps we will not reduce the number of central bank digital currencies, but their roles may be completely different. Maybe I really don't know. But we will not announce doing this in commercial operations. The young investors I mentioned are the main group opening cryptocurrency asset accounts in Japan, many of whom come from the healthcare industry. They gather information from dietary or fashion icons and then deposit money into their accounts, although the amounts are small, they do have this enthusiasm.

So I believe that from the very beginning, after lowering our tax rate to 20%, they will be able to access services and then transition to fully utilizing stablecoins. Instead of returning the money to the bank. I think the method of exchange or settlement between these investments will become a thing of the past for ordinary users or a wide range of users, even if the amount may be small.

Heath Tarbert: Each country must decide for itself whether to use central bank digital currencies, as you mentioned, there are many options. Many Western countries, including the United States, choose to avoid adopting central bank digital currencies, regardless of where they are in the world, 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 central bank digital currency in the near or even distant future. In the future, dollars on the blockchain are more likely to exist in the form of stablecoins.

Host: I think this is truly a perfect way to conclude. The time is almost up, but I am very grateful. I learned a lot from this conversation.

Kiyama Satsuki: In this world, we all pursue a goal, it's amazing.

Heath Tarbert: Let's end it here. Thank you very much.