Japan Approves Major Reforms to Its Cryptocurrency Regulations

Japan has approved major reforms to its cryptocurrency regulations, impacting crypto brokerages and stablecoin laws.

Japan is set to introduce major reforms to its cryptocurrency regulations, impacting crypto brokerages, stablecoin laws, and entry barriers.

The Cabinet has approved a decision to amend the Payment Servies Act, which will now go before the National Diet.

The Financial Services Agency (FSA) stated that the amendments will ease the entry barriers for companies to facilitate in crypto transactions.

As it stands, firms must match the supply of stablecoins 1:1 with cash deposits in regulated banks but the new amendments would allow issuers to use certain Japanese and U.S. government bonds with a remaining maturity of three months or less can be as collateral instead.

Issuers can place funds in fixed-term, high-interest bond accounts that allow early cancellation, but no more than 50% of the stablecoin reserves can be backed by bonds—the remainder must be held in current accounts.

The bill also seeks to remove financial and anti-money laundering (AML) requirements for crypto brokerages, which will lower the barrier to entry for new players.

Brokerages must demonstrate that they do not directly handle customer funds to qualify for this. Mercari, SBI Securities, and Monex Securities, are already preparing to launch brokerage services.