Japan’s Financial Services Agency Considers Allowing Banks to Hold Cryptocurrencies
Japan’s Financial Services Agency (FSA) is reportedly preparing to review regulations that could allow banks to acquire and hold cryptocurrencies such as Bitcoin for investment purposes. This move would mark a significant policy shift, as current supervisory guidelines, revised in 2020, effectively ban banks from holding crypto due to volatility risks. According to a report from Livedoor News, the FSA plans to discuss the reform at an 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 like stocks and government bonds. Regulators are expected to explore a framework for managing crypto-related risks, such as sharp price swings that could impact a bank’s financial health. If approved, the FSA will likely impose capital and risk-management requirements before permitting banks to hold digital assets. 
Expansion of Crypto Services in Japan
The FSA is also considering allowing bank groups to register as licensed “cryptocurrency exchange operators,” enabling them to offer trading and custody services directly. Japan’s crypto market continues to grow rapidly, with more than 12 million crypto accounts registered as of February 2025, about 3.5 times higher than five years ago, according to FSA data. At the start of September, the FSA sought to place crypto regulation under the Financial Instruments and Exchange Act (FIEA), shifting it from the Payments Services Act to strengthen investor protection and align crypto with securities laws.
Stablecoin Launch and Insider Trading Regulations
Three of Japan’s largest banks, including Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC) and Mizuho Bank, have joined forces to issue a yen-pegged stablecoin aimed at streamlining corporate settlements and reducing transaction costs. Meanwhile, Japan’s Securities and Exchange Surveillance Commission plans to introduce new rules to ban and penalize crypto insider trading. These developments demonstrate Japan’s efforts to create a more regulated and secure environment for cryptocurrency investments and transactions.
For more information on Japan’s crypto regulatory environment and the potential impact of these changes on the market, please refer to the original source: https://cointelegraph.com/news/japan-fsa-may-let-banks-hold-bitcoin-crypto-assets?utm_source=rss_feed&utm_medium=rss_tag_bitcoin&utm_campaign=rss_partner_inbound
