Japan’s Financial Services Agency (FSA) is reviewing regulations that could enable banks to acquire and retain cryptocurrencies, including Bitcoin, for investment purposes. This proposed change represents a significant policy shift since existing guidelines revised in 2020 effectively prohibit banks from holding crypto due to volatility concerns.
According to a recent report from Livedoor News, the FSA is expected to discuss these reforms during an upcoming meeting of the Financial Services Council, which serves as an advisory group to the Prime Minister. This initiative aims to standardize crypto asset management similarly to traditional financial instruments such as stocks and government bonds.
Officials are anticipated to establish a framework to mitigate crypto-related risks, such as significant price fluctuations that could jeopardize a bank’s financial health. Should the proposal be approved, the FSA would likely enforce capital and risk-management standards before allowing banks to manage digital assets.
Japan May Permit Banks to Operate Licensed Crypto Exchanges
The FSA is also examining the possibility of enabling bank groups to register as licensed cryptocurrency exchange operators, thereby allowing them to offer trading and custody services directly.
The crypto market in Japan is experiencing rapid growth, with over 12 million crypto accounts documented as of February 2025, which is approximately 3.5 times greater than five years ago, based on FSA reports.
At the start of September, the FSA initiated steps to bring crypto regulations under the Financial Instruments and Exchange Act (FIEA), transitioning it from the Payments Services Act to enhance investor protection and align cryptocurrencies with securities regulations.
The regulator has indicated that many challenges related to crypto closely resemble those typically addressed by the FIEA, warranting the application of similar regulatory mechanisms and enforcement.
Japan’s Major Banks Collaborate on Yen-Pegged Stablecoin
Three of Japan’s leading banks, namely Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank, have collaborated to issue a yen-pegged stablecoin aimed at facilitating corporate settlements and minimizing transaction fees.
Concurrently, Japan’s Securities and Exchange Surveillance Commission plans to impose new regulations to prevent and penalize insider trading in the cryptocurrency sector.
