Japan to Ease Crypto Regulations with Proposed Reforms

Japan Moves to Ease Crypto Regulations with Proposed Reforms

The Japanese Financial Services Agency (FSA) has approved a report recommending policy changes that aim to ease crypto regulations in the country. The proposed reforms, if implemented, would impact two main payment-related laws in Japan, the Trust Business Act and the Payment Services Act.

Stablecoin Regulations to be Relaxed

The report suggests allowing stablecoins to be backed by short-term government bonds and fixed-term deposits, in addition to demand deposits. An upper limit of 50% on the bonds and deposits that can be used as collateral for stablecoins is also proposed. This reform is expected to provide issuers with more flexibility in managing funds across multiple products.

The policy would help issuers “strike a balance between enhanced convenience and safety.”

However, the report notes that additional mechanisms may be needed to ensure user protection.

New Category for Intermediary Crypto Businesses

The working group’s proposal also suggests creating a new category for “intermediary” crypto businesses or brokerages. Currently, firms that act as brokers in the exchange of crypto assets are subject to the same registration requirements as crypto exchange platforms operating in Japan.

Under the new recommendation, intermediaries would be subject to their own requirements and anti-money laundering obligations. This regulatory change is expected to make it easier for crypto firms to enter the Japanese market.

Classification of Cryptocurrencies to be Reassessed

Earlier this month, the Japanese FSA announced that it is considering changing how cryptocurrencies are classified under Japanese law. The financial watchdog plans to classify them as financial products, similar to securities rather than payment tools. The final decision is expected to be announced in June 2025.

These proposed reforms demonstrate the Japanese government’s efforts to create a more favorable environment for crypto businesses and investors. As the regulatory landscape continues to evolve, it’s essential to stay informed about the latest developments in the crypto space.

For more news and updates on the crypto market, visit Global Crypto News.