Japan Considers Allowing Banks to Trade and Hold Cryptocurrencies
Japan’s Financial Services Agency (FSA) is reviewing rules that currently prevent banks from holding cryptocurrencies. The agency aims to allow banks to trade digital assets like stocks and government bonds. This move follows concerns about the volatile prices of cryptocurrencies.
The FSA plans to introduce safety measures to reduce risks from sudden price changes. Officials will discuss the proposal at an upcoming Financial Services Council meeting. This council advises Japan’s Prime Minister on key financial issues.
FSA May Let Banks Register as Crypto Exchange Operators
The FSA is also considering allowing banks to register as licensed cryptocurrency exchange operators. This would enable banks to offer crypto trading and custody services directly to customers.
Japan’s crypto market has grown rapidly, with over 12 million registered accounts as of February 2025. This is nearly 3.5 times more than five years ago.
The regulator wants to move crypto oversight from the Payments Services Act to the Financial Instruments and Exchange Act (FIEA). This change would place cryptocurrencies under securities law, providing stronger investor protection and clearer supervision. The FSA said most crypto issues are already covered by the FIEA, making this a practical step.
Major Banks Collaborate on Stablecoin and Tighter Crypto Regulations
- Japan’s largest banks—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corp., and Mizuho Bank—are developing a yen-backed stablecoin.
- The stablecoin aims to speed up and reduce costs for business payments.
- The Securities and Exchange Surveillance Commission plans to enforce stricter penalties for insider trading in crypto markets.
Japan’s evolving crypto policies reflect growing acceptance of digital finance. With national debt around 240% of GDP, cryptocurrencies may become an alternative for investors outside traditional banking.
