Key notes
- Japan may soon allow banks to invest in and hold Bitcoin.
- The goal is to treat cryptocurrencies like stocks or bonds.
- Japan has over 12 million cryptocurrency users as of February 2025.
Japan’s Financial Services Agency (FSA) is considering allowing banks to invest in and hold Bitcoin (BTC) and other cryptocurrencies.
According to a local outlet Livedoor NewsA Financial Services Board task force will review the proposal soon.
If approved, it would signal that digital assets are being integrated into underlying financial instruments, and are not viewed as speculative. This would allow banks to invest in crypto assets as they currently invest in stocks or government bonds.
Current rules in Japan, approved in 2020, prevent banks from holding cryptocurrencies due to volatility risks. Easing these rules could open up significant flows of institutional capital into Bitcoin and other digital assets.
According to the report, the new system will include strict risk management and capital guarantees.
Banks are likely to face stress tests and exposure limits to ensure stability while allowing innovation.
The path to mainstream adoption
Japan is one of the fastest growing cryptocurrency markets, with over 12 million users – a 3.5 times growth over the past five years.
The increased adoption proves that the demand is already there; A shift in policy would simply formalize what is happening organically.
The latest proposal from the Financial Services Authority enhances public confidence as it will help reduce fraud concerns and bring retail users into regulated cryptocurrency environments.
In February, the regulator ordered Apple and Google to remove several cryptocurrency exchanges like KuCoin and Bybit from their app stores.
On October 9, Binance Japan partnered with Japanese payments provider PayPay after the company acquired 40% of Binance Japan. This was a clear sign of rising demand for digital assets in Japan.
Moreover, Japan’s three largest banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group – have joined forces to issue a stablecoin pegged to the yen and the US dollar to create a unified digital payment ecosystem.
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Waheed has been analyzing and reporting on the latest trends in the decentralized ecosystem since 2019. He has over 4,000 articles to his name and his work has been featured in some of the leading outlets including Yahoo Finance, Investing.com, Cointelegraph, and Benzinga. Beyond the reports, Wahid likes to connect the dots between DeFi and macro in his On-chain Monk newsletter.
The post Japan’s Big Banks Eye Bitcoin as New Rules Loom first appeared on Investorempires.com.
