Tokyo, March 10, 2025 — Japan has taken a significant step toward normalizing its cryptocurrency market with the approval of new regulatory reforms on March 10. The amendments, passed by the National Diet, ease restrictions on crypto brokerages and allow stablecoin issuers to use government bonds as collateral, signaling a progressive shift in the country’s approach to digital assets.
The reforms amend Japan’s Payment Services Act, reclassifying crypto brokerages as “intermediary businesses” rather than subjecting them to the same stringent requirements as crypto exchanges. This change eliminates the need for brokerages to obtain permits equivalent to those of exchanges or wallet operators, reducing barriers to entry while maintaining anti-money laundering (AML) oversight. The move is expected to encourage new players, such as gaming companies and digital wallet providers, to enter the market, fostering innovation and competition.
A key highlight of the legislation is the updated stablecoin framework. Previously, issuers were mandated to back stablecoins with a 1:1 cash reserve in regulated banks. Under the new rules, stablecoin issuers can now use short-term Japanese and U.S. government bonds with a maturity of three months or less as collateral, though bonds are capped at 50% of reserves, with the remainder held in cash. This flexibility aims to enhance liquidity and profitability for issuers while ensuring stability for users.
The Financial Services Agency (FSA), which championed these reforms, views them as a balance between innovation and investor protection. An FSA spokesperson stated, “These changes reflect Japan’s commitment to fostering a robust digital economy while adapting to global financial trends.” The reforms come amid growing adoption of cryptocurrencies in Asia and follow Japan’s earlier pioneering efforts, such as recognizing Bitcoin as a legal payment method in 2017.
Market participants have welcomed the news. SBI VC Trade, a subsidiary of SBI Holdings, recently entered the stablecoin market with USDC support, aligning with the government’s push for broader digital asset integration. Analysts predict that the relaxed rules could position Japan as a regional leader in cryptocurrency innovation, building on its reputation for regulatory clarity.
The reforms are set to take effect in June 2025, pending final procedural steps, and mark a pivotal moment in Japan’s ongoing evolution as a crypto-friendly jurisdiction.
