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Japan’s Financial Services Agency (FSA) has approved new measures designed to improve the management of stablecoin collateral and enhance protection for Japanese crypto users.

The regulatory move follows recent concerns over the security of digital assets and aims to provide a safer environment for users dealing with foreign-owned crypto exchanges, especially in the event of bankruptcy.

The FSA’s approval allows stablecoin issuers in Japan to diversify their backing assets. Digital assets can now be backed by short-term government bonds and certain fixed-term deposits, in addition to the previously permitted demand deposits.