Japan’s Financial Services Agency (FSA) is moving toward a significant policy shift that could allow banks to directly hold and manage cryptocurrencies, including Bitcoin. This potential change would mark a departure from existing restrictions and could pave the way for broader adoption of digital assets within Japan’s financial sector. As the country’s crypto market continues its rapid expansion, regulatory reforms are being actively discussed to integrate digital assets more seamlessly into mainstream finance.

The FSA is considering revising regulations to permit banks to acquire and hold cryptocurrencies like Bitcoin for investment.
Current guidelines, revised in 2020, restrict banks from crypto holdings due to volatility concerns.
The agency plans to review the framework at an upcoming Financial Services Council meeting, aiming to align crypto management with traditional assets.
Regulators are also exploring banks’ licensing to operate as official crypto exchange providers.
Japan’s crypto market has experienced substantial growth, with over 12 million registered crypto accounts as of February 2025.

The FSA is reportedly preparing to re-evaluate its regulatory approach regarding cryptocurrency holdings by financial institutions. These discussions aim to mitigate risks such as sharp price swings that could threaten banks’ stability. Should the reforms be approved, the FSA is likely to introduce stricter capital and risk management requirements before banks can hold digital assets, ensuring investor and systemic protection.

Japan may let banks operate licensed crypto exchanges

The regulatory body is also contemplating granting bank groups the authority to register as licensed “cryptocurrency exchange operators,” which would allow them to provide trading and custody services directly. This move signals a strategic effort to foster innovation while maintaining oversight within Japan’s vibrant crypto ecosystem.

Meanwhile, Japan’s crypto market continues to demonstrate robust growth, with the number of crypto accounts climbing to over 12 million by February 2025 — approximately 3.5 times higher than five years ago, according to FSA data.

Earlier this September, the FSA proposed consolidating crypto regulation under the Financial Instruments and Exchange Act (FIEA), shifting oversight from the Payments Services Act. This change aims to enhance investor protections and better align crypto laws with existing securities regulations, addressing issues similar to those encountered in traditional financial markets.

The regulator emphasized that many concerns within the crypto sector resemble those traditionally addressed under the FIEA, making it appropriate to adopt similar enforcement mechanisms.

Japan’s top banks to launch yen-pegged stablecoin

In addition to regulatory reforms, three major Japanese banks—Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank—are teaming up to issue a yen-pegged stablecoin. This digital currency aims to streamline corporate settlements and reduce transaction costs, representing a push toward more efficient financial operations through blockchain technology.

Meanwhile, Japan’s Securities and Exchange Surveillance Commission is preparing to introduce new regulations to combat crypto insider trading, aligning with worldwide efforts to bolster market integrity and investor confidence.

The country’s evolving regulatory landscape underscores its strategic focus on fostering a secure, innovative crypto environment that integrates blockchain technology into traditional finance while safeguarding market participants.