Japan is set to ease cryptocurrency regulations, allowing greater flexibility for stablecoin issuers and lowering entry barriers for crypto brokerages. The reforms, recently approved by Japan’s Financial Services Agency (FSA), reflect the country’s ambition to become a global leader in the digital asset industry.
One of the key changes permits stablecoin issuers to diversify their collateral beyond cash deposits. Under the new rules, issuers may hold up to 50% of their reserves in short-term Japanese and U.S. government bonds with maturities of three months or less. The remaining reserves must be maintained in bank current accounts. This shift aims to provide greater operational flexibility while maintaining regulatory oversight, enhancing Japan’s appeal to international crypto investors.
In addition to stablecoin reforms, Japan is introducing a new category for “intermediary” crypto businesses. This measure allows brokerages to operate without securing the same licences required for cryptocurrency exchanges or wallet operators. To qualify, these intermediaries must demonstrate that they do not directly manage customer funds while adhering to anti-money laundering (AML) protocols. This regulatory adjustment is expected to foster innovation by enabling new market participants to enter the crypto sector more easily, further establishing Japan as a cryptocurrency-friendly jurisdiction.
The proposed amendments have been approved by Japan’s Cabinet and are now awaiting review by the National Diet, the country’s parliament. Given the historical support for FSA-backed regulations, the bill is widely expected to pass without significant opposition. If enacted, the reforms will mark a significant milestone in Japan’s strategy to enhance its competitive edge in the global cryptocurrency landscape, attracting blockchain startups and foreign investments.
By easing regulatory constraints while maintaining essential safeguards, Japan aims to strike a balance between innovation and investor protection. These changes signal a broader effort to attract investment and position Japan as a leading hub for cryptocurrency and blockchain technologies on the international stage. With these forward-looking policies, Japan continues to pave the way for the future of digital finance in Asia and beyond.
