Japan’s SEC to Implement Favorable Regulations for Bitcoin and Altcoins

Japan's Financial Services Agency (FSA) is considering regulatory changes that would allow banks to hold cryptocurrencies like Bitcoin for investment purposes.

This step aims to enable banks to evaluate cryptocurrencies among investment instruments such as stocks and government bonds, amid the rapid spread of digital asset trading both domestically and globally.

The agency will discuss the matter with a working group of the Prime Minister's Financial Services Council in the coming days. However, the FSA plans to impose specific restrictions and risk management standards to protect banks' financial stability in the event of potential regulatory changes.

Currently, revised supervisory guidelines from 2020 effectively ban banks from holding crypto assets for investment purposes due to their high volatility and lack of collateral. If this ban is lifted, the FSA will carefully assess the impact on banks' balance sheets and require them to strengthen their risk management systems.

The institution also plans to allow banking groups to register as cryptocurrency exchange operators. This will encourage the entry of institutions with high financial credibility into the market, aiming to provide individual investors with safer access to cryptocurrencies.

Cryptocurrency trading is growing rapidly in Japan. According to FSA data, the number of crypto accounts opened in the country surpassed 12 million as of February 2025, a nearly 3.5-fold increase compared to five years ago.

*This is not investment advice.