Japan’s Financial Regulator Considers Allowing Banks to Invest in Digital Currencies
The Japanese financial regulator, the Financial Services Agency (FSA), is considering a proposal to permit banks to purchase and hold digital currencies, such as Bitcoin, for investment purposes. According to a report by Yomiuri, the FSA will present this proposal at a working group meeting of the Financial Services Council. This move aims to align crypto management with traditional financial products, including stocks and government bonds, and will include additional regulations to ensure stability.
FSA’s Plans to Finalize Crypto Trading Rules and Combat Insider Trading
The FSA’s plans to permit banks to invest in digital currencies follow its efforts to finalize crypto trading rules by 2025 and combat crypto insider trading. The regulator has implemented surcharge orders, mandating violators to pay penalties for illicit gains. By allowing bank groups to register as “cryptocurrency exchange operators,” the FSA aims to create an environment that makes it easier for individual investors to invest in digital currencies.
Japan’s Growing Openness to Crypto and Its Potential Benefits
Japan has been struggling with escalating national debt, now nearing a staggering 240% of its GDP. The exceptionally high debt could prompt high inflation and other financial repression measures. As a result, the nation has been embracing crypto in many ways, including launching the first yen-backed stablecoin. The FSA said that it would approve the issuance of the stablecoin this month, aiming to use it for international remittances and corporate settlements.
Japanese firms are also betting big on Bitcoin treasuries and stockpiling, led by Metaplanet. Recently, five Japanese firms announced fresh treasury allocations, adding a combined 156.79 BTC to their balance sheets. Metaplanet, Japan’s most aggressive Bitcoin treasury firm, has so far snapped 30,823 BTC, becoming the fourth-largest corporate Bitcoin holder. This growing openness to crypto in Japan reflects the nation’s positive regulatory efforts and its potential to drive economic growth.
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