The Financial Services Agency (FSA) in Japan is reportedly set to examine regulations that may permit banks to acquire and hold cryptocurrencies like Bitcoin for investment.
This development signifies a significant policy change since the current supervisory guidelines, updated in 2020, effectively prohibit banks from holding crypto due to associated volatility risks, as detailed in a Sunday report from Livedoor News.
According to the report, the FSA intends to address this reform at the next Financial Services Council meeting, which acts as an advisory body to the Prime Minister. The goal is to align the management of crypto assets with traditional financial instruments like stocks and government bonds.
Regulators are anticipated to develop a framework for handling crypto-related risks, such as volatile price fluctuations that might affect a bank’s financial stability. If approved, the FSA is likely to impose capital and risk-management requirements prior to allowing banks to hold digital assets.
Related: A new Prime Minister in Japan could enhance the crypto economy and refine blockchain regulations
Japanese banks might be allowed to operate licensed crypto exchanges
The FSA is also contemplating the possibility of allowing bank groups to register as licensed “cryptocurrency exchange operators,” which would enable them to provide trading and custody services directly.
Japan’s crypto market is expanding quickly, with over 12 million crypto accounts registered as of February 2025, approximately 3.5 times more than five years ago, based on FSA statistics.
At the beginning of September, the FSA aimed to regulate crypto under the Financial Instruments and Exchange Act (FIEA), transitioning responsibilities from the Payments Services Act to enhance investor protection and align crypto with securities legislation.
The regulator noted that various issues within the crypto sector resemble those typically handled under the FIEA, suggesting it may be suitable to apply similar methods and enforcement strategies.
Related: The new PM of Japan could be advantageous for risk assets and crypto markets
Japan’s leading banks to introduce yen-pegged stablecoin
Three of Japan’s largest banks, including Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank, have collaborated to launch a yen-pegged stablecoin designed to simplify corporate settlements and lower transaction fees.
In parallel, Japan’s Securities and Exchange Surveillance Commission plans to implement new regulations to prohibit and penalize insider trading in the crypto space.
Magazine: Returning to Ethereum — Insights from Synthetix, Ronin, and Celo
