Japan's three EPI issuance routes · overview of trust, bank and funds-transfer-provider models

Wiki route

This entry sits under fintech index. Read it with Japan’s financial regulation — legal framework for tokens, crypto-assets and payments for adjacent context and Japan’s three-tier stablecoin legal framework (JPYC, USDC and Project Pax) for the broader system boundary.

[!info] TL;DR Effective from 2023-06 the amended Payment Services Act established a framework for fiat-linked electronic payment instruments and for electronic payment instrument service providers that intermediate them. Banks, funds-transfer providers, trust companies and similar entities are contemplated as issuance routes, but limits, redemption and user protection differ by governing law, registration category and product design. A project announcement alone does not prove that a product has been issued or an entity registered.

Key facts

• Enactment in 2022-06 and commencement in 2023-06 established the framework for electronic payment instruments.
• An electronic payment instrument’s issuance route is distinct from registration for purchase, exchange and management by an electronic payment instrument service provider.
• Funds-transfer providers have Type I, Type II and Type III categories; amount limits cannot be summarized for every product as a uniform “100 万円 / 件” (one million yen per transaction).
• Specific examples of trust, bank and funds-transfer-provider models should be confirmed through the FSA registration lists, issuer disclosures, and the application of trust, banking and funds-transfer laws.

Mechanism / How it works

Comparison of EPI issuance routes:

The table below organizes the framework based on the FSA materials on electronic payment instruments and the Payment Services Act. For the issuance and registration status of a specific product, prioritize the latest FSA list and issuer disclosures.

These three categories are legal issuance routes based on the issuing entity. They do not automatically determine a particular chain, customer group, circulation amount or governance ratio. Verify Progmat, bank experiments and JPYC against the latest issuance, registration and product materials for each.

Origin & evolution

The amendment concerning electronic payment instruments was enacted in 2022-06 and took effect in 2023-06 together with the related government orders and supervisory guidelines. See the FSA notice for the history of the framework and current materials. For each project, distinguish a concept announcement, the issuer’s eligibility under its governing law, registration of an intermediary, and actual product issuance; track these through the latest FSA lists and company disclosures.

Related

• Wiki Index
• Japan’s four stablecoin camps
• Japan stablecoin regulatory landscape
• Japan’s trust-type stablecoin architecture
• GENIUS Act implementation status

Sources

• Financial Services Agency — Framework information for electronic payment instruments and crypto-assets: https://www.fsa.go.jp/policy/virtual_currency02/index.html
• Financial Services Agency — Government ordinances and supervisory guidelines accompanying enforcement of the amended Payment Services Act: https://www.fsa.go.jp/news/r4/sonota/20230526/20230526.html
• e-Gov Law Search — Payment Services Act (平成21年法律第59号): https://elaws.e-gov.go.jp/document?lawid=421AC0000000059