Japan’s FSA Considers Letting Banks Hold Bitcoin and Other Cryptocurrencies
Regulators prepare to let traditional banks invest in and trade digital assets amid rising crypto adoption
Japan’s Financial Services Agency (FSA) is reportedly considering a groundbreaking reform that could allow the country’s banks to hold and invest in cryptocurrencies such as Bitcoin. The move, if approved, would mark a major shift from Japan’s current regulations, which prohibit banks from holding crypto due to concerns over price volatility and systemic risk.
According to Livedoor News, the FSA plans to discuss the proposal at an upcoming Financial Services Council meeting, an advisory group to the Prime Minister. The goal is to treat crypto assets more like conventional investments such as stocks and government bonds, aligning Japan’s financial framework with the growing influence of digital assets.
The regulator is expected to establish strict capital and risk management guidelines before giving banks access to crypto investments. The discussion also includes potentially allowing bank groups to register as licensed “cryptocurrency exchange operators,” enabling them to directly offer crypto trading and custody services to clients.
Japan’s crypto market has seen explosive growth, with over 12 million registered accounts as of February 2025 — nearly 3.5 times higher than five years ago, according to FSA data. Earlier this year, the agency proposed shifting crypto regulation from the Payments Services Act to the Financial Instruments and Exchange Act to enhance investor protection and align digital assets more closely with securities laws.
In parallel, Japan’s largest banks — MUFG, SMBC, and Mizuho — have announced plans to jointly issue a yen-pegged stablecoin to streamline settlements and cut transaction costs. Regulators are also preparing to introduce penalties for insider trading in the crypto market, signaling Japan’s commitment to fostering a safer, more transparent digital economy.
