Japan has approved significant reforms to its cryptocurrency regulations, easing restrictions on brokerages and stablecoin issuers.
The amendments, endorsed by the country’s Financial Services Agency (FSA), will be presented to the National Diet, where approval is expected. The changes could reshape Japan’s crypto industry by lowering entry barriers and altering financial backing requirements for stablecoins.
The new amendments redefine crypto brokerages as “intermediary businesses,” exempting them from the stringent licensing requirements imposed on cryptocurrency exchanges and wallet operators. This shift allows firms to facilitate crypto transactions without acquiring the same permits required of full-fledged trading platforms.
Under the proposed changes, brokerages will also be exempt from financial and anti-money laundering (AML) regulations, provided they do not directly handle customer funds. This exemption is expected to attract more companies to the sector. Mercari, SBI Securities, and Monex Securities—three firms already active in Japan’s crypto exchange market—are reportedly preparing to launch brokerage services in anticipation of the new framework.
The legislative path for the amendments appears smooth. Historically, the National Diet has never rejected a crypto-related regulatory change approved by the Cabinet, which in turn has never opposed an FSA proposal.
Stablecoin Issuers Gain Greater Flexibility
Japan’s stablecoin regulations will also see major adjustments. Under current law, stablecoin issuers must maintain a one-to-one backing with cash deposits in regulated banks. The new framework introduces alternative options, allowing issuers to back their digital currencies with certain government bonds.
The amendments specify that only Japanese and U.S. government bonds with a remaining maturity of three months or less will be eligible as collateral. Additionally, issuers can store funds in fixed-term, high-interest bond accounts with early cancellation options. However, these bonds cannot exceed 50% of a stablecoin’s total reserves; the remaining balance must still be held in traditional bank accounts.
Beyond the immediate legislative changes, the FSA is exploring the possibility of classifying cryptocurrencies as securities, a move that could impact the regulatory landscape by 2026. This reclassification would bring cryptocurrencies under Japan’s securities laws, potentially allowing the introduction of crypto-based exchange-traded funds (ETFs). The shift could broaden investor participation but may also introduce additional compliance requirements for firms operating in the space.
The FSA’s authority in shaping Japan’s crypto regulations has been historically strong, and any future changes are likely to pass through the same streamlined approval process seen with previous amendments.
