Japan’s Financial Services Agency (FSA) is considering a significant regulatory shift that could allow banks to acquire and hold cryptocurrencies such as Bitcoin for investment purposes. This potential move would align digital asset management with traditional investments, positioning Japan as a regulated hub for digital finance.
The FSA is reportedly preparing to review regulations that would permit banks to purchase and hold digital assets like Bitcoin. This reform would enable banks to trade cryptocurrencies similarly to stocks and bonds, with regulations to ensure stability
Japan Considers Allowing Banks to Trade Digital Assets Such as Bitcoin: Report · CoinDesk · 2025/10/20
The reform would enable banks to trade cryptocurrencies similarly to stocks and bonds, with regulations to ensure stability.
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Currently, under the FSA’s guidelines updated in 2020, banks are not allowed to hold crypto assets due to concerns over price volatility and potential losses affecting banks’ financial health. The proposed framework would roll back that restriction with added safeguards, allowing banks to buy and sell digital assets alongside traditional instruments like equities and bonds under strict financial soundness rules
Japan mulls rule change to let banks hold Bitcoin, crypto for investment · Crypto Briefing · 2025/10/19
Japan may allow banks to invest in Bitcoin and crypto assets, with the FSA considering new rules to manage risks and financial stability.
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📊 Potential Impact on the Crypto Market
If approved, this move could have several implications:
- Increased Institutional Participation: Banks’ involvement could lead to greater institutional investment in cryptocurrencies, potentially boosting market liquidity and stability.
- Enhanced Regulatory Clarity: Clear guidelines would provide a more predictable environment for crypto-related businesses and investors.
- Market Expansion: Broader acceptance of cryptocurrencies could lead to increased adoption among retail investors.
🔍 Broader Context: Japan’s Crypto Landscape
Japan has been at the forefront of cryptocurrency regulation. In 2017, it became one of the first countries to officially recognize Bitcoin as legal tender. The FSA has since implemented measures to ensure the security and transparency of crypto exchanges operating within the country.
The potential policy change aligns with Japan’s broader efforts to integrate digital assets into its financial system. For instance, Japan’s three largest financial institutions—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group—plan to jointly issue stablecoins, digital currencies pegged to real-world currencies, to facilitate seamless transactions among corporate clients
Japan’s top banks to jointly issue stablecoin, Nikkei says · reuters.com · 2025/10/17
Japan’s three largest financial institutions—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group—plan to jointly issue stablecoins, according to a report by the Nikkei business daily. These digital currencies will be pegged to real-world currencies to maintain stable values. The initiative will start with a yen-pegged stablecoin and may eventually include a U.S. dollar-pegged coin. A key part of the plan is to create a uniform standard that will enable seamless stablecoin transactions among the banks’ corporate clients. This collaboration marks a significant move by Japan’s banking sector into the digital currency space.
Japan’s consideration to allow banks to hold cryptocurrencies marks a significant step toward integrating digital assets into traditional financial systems. If enacted, this policy could set a precedent for other nations contemplating similar regulatory frameworks, potentially accelerating the global adoption of cryptocurrencies.
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