Japan’s Financial Services Agency (FSA) is reportedly preparing to revise regulations that would allow banks to acquire and hold cryptocurrencies such as bitcoin for investment purposes.
The move would mark a major policy shift from current supervisory guidelines, which were revised in 2020, effectively banning banks from holding crypto due to volatility risks, according to a report on Sunday from Levador News.
According to the report, the FSA intends to discuss the reforms at the upcoming meeting of the Financial Services Council, an advisory body to the prime minister. The initiative aims to align crypto asset management with traditional financial products such as stocks and government bonds.
Regulators are expected to explore a framework for managing crypto-related risks, such as sharp price swings that could affect a bank’s financial health. If approved, the FSA will likely impose capital and risk management requirements before banks are allowed to hold digital assets.
Related: New Japan PM May Boost Crypto Economy, ‘Refine’ Blockchain Regulations
Japan May Let Banks Run Licensed Crypto Exchanges
The FSA is also considering allowing bank groups to register as licensed “cryptocurrency exchange operators”, enabling them to offer direct trading and custody services.
According to FSA data, Japan’s crypto market is growing rapidly, with more than 12 million crypto accounts registered by February 2025, roughly 3.5 times more than five years ago.
In early September, the FSA sought to place crypto regulation under the Financial Instruments and Exchange Act (FIEA), moving it from the Payment Services Act to strengthen investor protection and align crypto with securities laws.
The regulator said many of the issues within crypto are similar to those traditionally addressed under FIEA, so applying similar procedures and enforcement may be appropriate.
Related: Japan’s new prime minister could be a boon for risk-asset, crypto markets
Japan’s top banks to launch yen-pegged stablecoins
Three of Japan’s biggest banks, including Dotsubashi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp (SMBC) and Mizuho Bank, have joined forces to issue a yen-pegged stablecoin to streamline corporate settlements and reduce transaction costs.
Meanwhile, Japan’s Securities and Exchange Supervisory Commission plans to introduce new rules to ban and fine crypto insider trading.
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