The Financial Services Agency (FSA) of Japan is considering allowing local banks to trade cryptocurrencies. The proposal presents a significant change in policy for the country, which has long restricted banks from trading digital assets because of price volatility.
The FSA plans to treat cryptocurrencies more like traditional financial commodities, such as stocks and government bonds, according to a published report. The agency also plans to introduce safety measures to protect investors from risks tied to sudden price changes. Although discussions on the proposal are expected to take place at the next Financial Services Council meeting.
Aside from this proposal, the FSA is also considering letting banks register as licensed “cryptocurrency exchange operators.” This move would allow banks to offer crypto trading and custody services directly to their customers. This proposal is significant to Japan’s crypto market as it continues to expand, with over 12 million registered accounts as of February 2025, and close to 3.5 times more than five years ago.
In addition, the regulator aims to shift crypto oversight from the Payments Services Act to the Financial Instruments and Exchange Act (FIEA). This would therefore place cryptocurrencies under the same law as securities, thereby providing strong investor protection and clearer supervision.
Meanwhile, Japan’s leading banks, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corp., and Mizuho Bank, are jointly developing a yen-backed stablecoin to make business payments faster and cheaper.
The Securities and Exchange Surveillance Commission is also planning stricter penalties for insider trading in the crypto market.
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