Japan is looking to reform crypto policies, as Financial Services Agency (FSA) is set to introduce significant reforms in the regulation of stablecoins and crypto brokerage businesses.
According to a local media report dated 19 February 2025, “the policy includes allowing stablecoins to be backed by short-term government bonds and certain fixed-term deposits in addition to the current demand deposits.”
🚨 Japan’s FSA Approves Stablecoin Reform – Key Changes Coming in 2025 🇯🇵
📌 Stablecoin Backing:
✔️ Backed by govt bonds, term & demand deposits
✔️ Max 50% cap on bonds & deposits as collateral📌 Crypto Intermediaries:
✔️ Separate registration for brokerage firms
✔️ No need to… pic.twitter.com/k0XvPNrpgL— Stabolut (@stabolut) February 20, 2025
According to the report, the aim of the newly introduced policy is to set an upper limit of 50% on the amount of new assets that can be incorporated, striking a balance between improved convenience and safety.
Explore: Japan Considers Approving Bitcoin ETFs, Can Reduce Crypto Tax From 55% To 20%
Countering Lengthy, Stringent Requirements
Currently, Japanese crypto brokerages face stringent requirements under the same Virtual Asset Service Provider (VASP) licensing system that applies to crypto exchanges.
This process is not only lengthy but also technically and financially demanding. It actively deters many firms from entering the market.
Critics argue that brokerages, which act as intermediaries rather than custodians of client assets, should not be subjected to the same rigorous standards as exchanges.
In response, a working group commissioned by the FSA has proposed creating a new regulatory category. This will specifically be for intermediary crypto businesses. It would involve streamlined requirements and anti-money laundering (AML) protocols. Furthermore, it will be tailored to brokerages’ unique roles. Under this framework, exchanges, token issuers, and custody firms would bear greater responsibility for user protection.
The proposed changes are expected to lower entry barriers for various players, including gaming companies and wallet operators, potentially boosting innovation in Japan’s crypto ecosystem.
Explore: Japan To Finalize Crypto Tax By June, Adopts XRP For International Transactions
Japan Considers Approving Bitcoin ETFs, Can Reduce Crypto Tax From 55% To 20%
The FSA may finally lift the ban on Bitcoin spot exchange-traded funds (ETFs) and approve it sooner rather than later.
Reports suggest that FSA is currently focused on Bitcoin and Ethereum ETF approvals.
Japan is also considering the reclassification of cryptocurrencies.
In the future, crypto maybe classified under Financial Instruments and Exchange Act (FIEA). Currently, digital assets are treated as payment instruments under the Payment Services Act (PSA). This reclassification would bring cryptocurrencies under stricter financial regulations, akin to securities, requiring companies to provide detailed disclosures about their operations.
While legislative amendments could come by 2026, Japan’s FSA plans to announce its policy direction as early as June 2025.
Furthermore, if Japan finalizes on cutting crypto tax to 20%, it could be a game changer for investors.
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