The Financial Services Agency (FSA) of Japan is reportedly set to review regulations that might allow banks to acquire and hold cryptocurrencies like Bitcoin for investment purposes.
This development would represent a significant policy change, as current guidelines, revised in 2020, effectively prohibit banks from holding crypto due to concerns over volatility risks, according to a Sunday report from Livedoor News.
The FSA intends to address this reform in an upcoming meeting of the Financial Services Council, which serves as an advisory body to the Prime Minister. The initiative aims to align the management of crypto assets with traditional financial products like stocks and government bonds.
Regulators are anticipated to consider a framework for managing crypto-related risks, including sudden price fluctuations that could affect a bank’s financial stability. If approved, the FSA will likely impose capital and risk-management requirements before allowing banks to hold digital assets.
Related: New Japan PM may bolster crypto economy, ‘refine’ blockchain regulations
Japan may permit banks to run licensed crypto exchanges
The FSA is also exploring the possibility of allowing bank groups to register as licensed “cryptocurrency exchange operators,” enabling them to provide trading and custody services directly.
Japan’s crypto market is experiencing rapid growth, with over 12 million registered crypto accounts as of February 2025, approximately 3.5 times higher than five years ago, according to FSA statistics.
At the beginning of September, the FSA sought to bring crypto regulation under the Financial Instruments and Exchange Act (FIEA), moving it from the Payments Services Act to enhance investor protection and align crypto with securities legislation.
The regulator noted that many issues in the crypto space bear resemblance to those typically addressed under the FIEA, making it sensible to apply similar mechanisms and enforcement measures.
Related: Japan’s new PM may benefit risk assets and crypto markets
Japan’s major banks to introduce yen-pegged stablecoin
Three of Japan’s leading banks, including 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 costs.
Concurrently, Japan’s Securities and Exchange Surveillance Commission is set to unveil new regulations to ban and penalize insider trading in crypto.
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