- Japan’s Financial Services Agency (FSA) plans to review regulations to allow banks to hold cryptocurrencies like Bitcoin for investment.
- The FSA may impose capital and risk-management rules to address crypto price volatility.
- Bank groups might be permitted to become licensed cryptocurrency exchange operators.
- Japan’s crypto market has over 12 million accounts as of February 2025, tripling in five years.
- Three major banks in Japan are collaborating to issue a yen-pegged stablecoin to improve corporate settlements.
Japan’s Financial Services Agency (FSA) is preparing to revise regulations to let banks acquire and hold cryptocurrencies such as Bitcoin for investment purposes. This change marks a shift from the current rules, which prohibit banks from holding crypto due to concerns about price volatility.
The FSA is set to discuss this reform at a meeting of the Financial Services Council, an advisory group to the Prime Minister. The goal is to regulate crypto asset management similarly to traditional financial products like stocks and government bonds.
The agency is considering a regulatory framework to manage risks related to sharp crypto price changes that could affect banks’ financial stability. If the changes are approved, banks will have to meet capital and risk management requirements before holding digital assets.
Additionally, the FSA is exploring allowing banking groups to register as licensed cryptocurrency exchange operators. This authorization would enable banks to offer crypto trading and custody services directly.
Japan’s cryptocurrency market has grown rapidly, with more than 12 million registered accounts by February 2025, which is about 3.5 times higher than five years ago. In early September, the FSA proposed moving crypto regulation under the Financial Instruments and Exchange Act (FIEA) to enhance investor protection. The FIEA is the law that currently governs securities markets in Japan.
Japan’s three largest banks — Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank — are collaborating on a yen-pegged stablecoin aimed at improving corporate settlement processes and reducing transaction costs.
Meanwhile, Japan’s Securities and Exchange Surveillance Commission plans to implement new rules to ban and punish insider trading involving cryptocurrencies.
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