Japan’s top financial watchdog is currently re-evaluating regulations that prevent banking institutions from possessing digital currencies, such as
According to a report published on October 19th by Livedoor News, the Financial Services Agency (FSA) is exploring the possibility of treating cryptocurrencies more like standard investment instruments, similar to stocks and bonds.
At present, Japanese banks are prohibited from holding any crypto assets. This restriction was implemented back in 2020 amid concerns regarding significant price volatility and potential risks to financial stability. However, the FSA is considering revisions to these existing policies.
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This matter is slated for discussion during an upcoming assembly of the Financial Services Council, a consultative body that advises the Prime Minister on fiscal strategies.
Should the FSA grant approval, banks will likely face specific preconditions related to capital adequacy and risk mitigation before being authorized to hold cryptocurrencies.
Beyond permitting banks to hold digital currencies, the FSA is also assessing whether bank-led conglomerates should be permitted to function as licensed crypto exchanges. This potential change could allow banking institutions to directly provide crypto trading and storage solutions to their clientele.
These possible policy adjustments coincide with a period of expansion in Japan’s crypto market. Data from February 2025 indicates that over 12 million cryptocurrency accounts have already been established.
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