Japan’s Financial Services Agency Reviews New Crypto Rules
Japan’s Financial Services Agency (FSA) is moving to create a framework that would allow banks to buy and sell cryptocurrencies, including Bitcoin. The plan aims to treat digital assets similarly to traditional financial instruments like stocks and bonds.
Local reports say the proposal will be discussed at an upcoming Financial Services Council working group meeting, which advises the Prime Minister on financial policy.
The FSA is expected to design rules focusing on risk management and financial stability, ensuring that cryptocurrency exposure does not endanger banks’ balance sheets.
Current Restrictions Reflect Crypto Volatility Concerns
Since 2020, Japanese banks have been prohibited from acquiring cryptocurrencies for investment due to price volatility risks. Regulators fear that large holdings could lead to heavy losses during market downturns, potentially threatening financial stability.
Even with future approval, the FSA plans to impose strict oversight, including risk management systems tailored to cryptocurrency markets. Japan’s proactive regulatory stance positions it as one of the few advanced economies seriously evaluating institutional crypto participation.
Banks Could Become Crypto Exchange Operators
The FSA is also exploring whether bank groups should be allowed to register as cryptocurrency exchange operators. Granting licenses to established banks could make it easier for retail investors to access crypto markets securely.
As of February 2025, over 12 million cryptocurrency trading accounts exist in Japan—3.5 times more than five years ago. Japan was among the first nations to legally recognize Bitcoin under the 2017 Payment Services Act, setting the stage for the country’s strong regulatory foundation.
Major Banks Prepare Yen-Pegged Stablecoin
Japan’s three largest banks—MUFG, SMBC, and Mizuho—are developing a yen-pegged stablecoin to modernize payments and reduce settlement costs. Built on MUFG’s Progmat platform, the stablecoin aims to be interoperable across corporate systems and may launch by year’s end.
Mitsubishi Corp. is expected to be the first to adopt the stablecoin for internal settlements, potentially improving cross-border transfers and cutting administrative overhead.
Digital Yen Pilot and the Future of Crypto in Japan
The Bank of Japan (BOJ) continues its digital yen pilot, testing a central bank digital currency (CBDC) launched in 2023. Combined with private stablecoin initiatives and evolving FSA regulations, Japan is positioning itself at the forefront of digital finance.
As regulators balance innovation and stability, Japan’s approach may become a model for integrating traditional banking with cryptocurrency markets.
