Japan’s House of Councilors has passed a pivotal amendment to the Payment Services Act, introducing a new legal category that will grant crypto brokerage firms a more flexible regulatory path. The law, approved on June 6, introduces the concept of “crypto intermediaries,” a designation that separates brokerages from fully licensed exchanges and wallet custodians.
Until now, crypto brokerages in Japan were required to obtain the same stringent licenses mandated for full-fledged exchanges—issued by the Financial Services Agency (FSA). These licenses came with strict compliance obligations that many firms viewed as unnecessarily burdensome for non-custodial or brokerage-based business models.
The newly established intermediary designation aims to correct that by easing entry requirements for brokerages while still maintaining core regulatory oversight. By creating a lower barrier to entry, the reform is expected to encourage innovation within Japan’s crypto industry, attract new players to the market, and diversify service offerings beyond centralized exchanges.
The revised bill, originally introduced by the FSA and approved by Japan’s lower house earlier this year, faced little resistance in parliament. With full legislative approval now secured, the new regulatory framework is slated for implementation by June 2026.
New Rules Target Investor Protection and Risk Containment
Japanese lawmakers say the revised crypto bill is designed not only to streamline innovation but also to protect retail investors in an increasingly digitized financial landscape. The amendments respond to past crises and reflect a shift toward a more resilient and consumer-focused regulatory regime.
Among the bill’s most notable provisions is a clause empowering the Prime Minister’s office to mandate that crypto exchanges and intermediaries retain a portion of their assets within Japan. The exact ratio will be set via Cabinet Order, offering the government flexibility to adjust safeguards based on evolving market conditions.
This domestic asset retention rule is a direct response to the collapse of FTX in 2022, where the Japanese subsidiary, FTX Japan, found itself unable to access parent company funds held overseas. The resulting freeze left users unable to withdraw their crypto holdings during the fallout. The new rules aim to prevent such scenarios by ensuring that even in cases of bankruptcy, firms will be obligated to process refunds through licensed domestic guarantors, such as trust banks.
Industry observers believe these safeguards, coupled with the new intermediary license, could lower the regulatory barrier for sectors like gaming and entertainment, which are increasingly eyeing Web3 integration. Lawmakers hope the blend of flexibility and accountability will position Japan as a global leader in secure digital asset adoption.
Quick Facts
- Japan passed amendments to the Payment Services Act introducing a “crypto intermediary” license, easing entry for brokerage platforms.
- New legal tools include a domestic retention order to prevent asset flight and stablecoin reserve reforms allowing up to 50% backing via government bonds.
- Brokerages will face lighter compliance requirements, while full exchange and custody services remain under strict regulation.
- The reforms are expected to support innovation in Web3 and fintech, aligning Japan with global regulatory trends toward tiered crypto regimes.
