Japan Moves to Establish Framework for Banks to Buy and Sell Cryptocurrencies
In a significant development, Japan is keen on establishing a framework to allow banks to buy and sell cryptocurrencies, including Bitcoin, marking a potential milestone in the country’s approach to digital assets.
The country’s Financial Services Agency (FSA) is beginning deliberations on system changes that would enable banks to acquire and hold cryptocurrencies in the same manner as stocks and government bonds. This move is expected to be discussed at an upcoming working group meeting of the Financial Services Council, an advisory body to the Prime Minister.
Implications of the Proposed Framework
The proposed framework would impose strict risk rules on bank crypto holdings, ensuring that the financial stability of banks is not compromised. Discussions will focus on establishing risk management systems for cryptocurrency holdings, addressing concerns about price volatility.
The FSA’s supervisory guidelines, revised in 2020, currently prohibit bank groups from acquiring crypto assets for investment purposes due to concerns about potential losses during sudden price drops. However, the new framework may allow banks to register as exchanges, expanding retail investor access to cryptocurrency markets.
Exchange Registration and Retail Access Expansion
If approved, the framework would enable bank groups to register as cryptocurrency exchange operators, creating an environment that makes it easier for individual investors to access cryptocurrency markets. Cryptocurrency trading is expanding across Japan, with accounts exceeding 12 million as of February 2025, approximately 3.5 times the number from five years earlier.
Japan’s early adoption of cryptocurrency regulation, including the recognition of Bitcoin as a legal payment method through the 2017 Virtual Currency Act amendments, provides a foundation for these more advanced policy discussions. The country’s regulatory framework plays a crucial role in shaping the industry’s growth, with private sector initiatives like the yen-pegged stablecoin project reflecting Japan’s push toward adoption.
Stablecoin Developments and Digital Yen
Meanwhile, three of Japan’s largest banks—Mitsubishi UFJ Financial Group (MUFG), Bank Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank—are collaborating to issue a yen-pegged stablecoin to modernize corporate settlements and lower transaction costs. The stablecoin will be built on MUFG’s Progmat platform and is expected to be rolled out by the end of the year.
Japan is also considering a digital yen through the Bank of Japan’s (BOJ) pilot program, which began in 2023. The BOJ has been testing a central bank digital currency (CBDC) as part of a broader effort to modernize its economy alongside the evolving digital payments space.
As Japan continues to innovate within the cryptocurrency space, its regulatory framework and private sector initiatives are expected to play a significant role in shaping the industry’s growth. For more information on Japan’s cryptocurrency regulations and developments, visit https://crypto.news/japan-considers-bitcoin-rule-change-allow-buy-crypto/.
