Japan Mulls Letting Local Banks Buy And Hold Crypto

Japan’s Financial Services Agency (FSA) is planning to review regulations that would enable banks to acquire and hold cryptos such as Bitcoin for investment purposes.

According to a Livedoor News report, that would mark a major policy shift given that current supervisory guidelines effectively ban banks from holding crypto due to volatility risks. 

The report said that the FSA plans to discuss the change in regulation at an upcoming meeting of the FInancial Services Council, which is an advisory body to the Prime Minister. The goal behind the reform is to align crypto asset management with that of traditional financial products such as stocks and government bonds. 

Banks Could Operate Licensed Crypto Exchanges

As part of the reform, the FSA is also reportedly considering allowing banking groups to register as licensed crypto exchange operators. If this happens, it will allow banks to offer trading and custody services directly to their customers. 

However, regulators are expected to first explore a framework to address the risks related to crypto, including big price swings that could impact the financial health of a bank. 

Meanwhile, Japan’s FSA also aims to make digital asset trading a fair market. The regulator reportedly plans to file amendments that would explicitly ban trading based on information that is not available to the public. Violators of this ban will face financial penalties that are proportional to their illicit gains.  

Japan’s Crypto Landscape Grows At A Rapid Pace

The reported regulatory reform is in response to a growing number of crypto users in Japan. 

According to data from the FSA, there are more than 12 million crypto accounts registered as of February this year. This is around a 3.5x increase over the past five years. 

Japan is also home to one of the biggest corporate Bitcoin holders in the world, Metaplanet. 

Data from Bitcoin Treasuries shows that Metaplanet is ranked as the fourth-biggest corporate Bitcoin treasury globally with 30,823 BTC on its balance sheet. 

Top ten largest corporate BTC holders (Source: Bitcoin Treasuries)

Metaplanet’s holdings rank it one position above Bitcoin Standard Treasury Company with its 30,021 BTC. It also ranks it above Bullish with its holdings of 24,300 BTC. Metaplanet holds more BTC on its balance sheet than companies like Trump Media & Technology Group, Coinbase, Tesla, and Clean Spark as well.

Japan’s Top Banks Plan To Launch Yen-Pegged Stablecoin

In addition to the reported reform and the possibility that Japanese banks get the greenlight to register as crypto exchanges, three of Japan’s top banks, namely Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC) and Mizuho Bank, have also joined forces to issue a yen-pegged stablecoin. 

Those banks collectively serve more than 300K corporate clients. With their planned stablecoin, the banks aim to streamline corporate settlements and reduce transaction costs. The consortium expects to roll out this yen stablecoin by the end of the year. 

The move by Japan’s top banks comes amid a boom in the stablecoins market, which has seen its capitalization break above $300 billion this year for the first time. 

In the past week, the market cap for the sector has risen over $2.7 billion to more than $306.93 billion, according to data from DefiLlama. Stablecoins pegged to the US dollar make up the lion’s share of the market, accounting for over $305.767 billion, while Tether’s USDT maintains a 59.50% share of the market as well. 

ETHEREUM $ETH SAW THE LARGEST STABLECOIN INFLOWS IN THE PAST 24 HOURS. SO BULLISH. pic.twitter.com/wBHp1mUicp

— Tom Lee Updates (Not Tom) (@TomLeeUpdates) October 20, 2025

Two of China’s largest technology companies, Alibaba-backed Ant Group and JD.com, have also tried to position themselves in the growing stablecoin market. 

However, their stablecoin plans were recently suspended in Hong Kong. This follows guidance from the People’s Bank of China and the Cyberspace Administration of China, which warned against private entities that are looking to issue assets representing currencies. 

The People’s Bank of China reportedly told both of the firms not to proceed due to concerns that private stablecoins would end up blurring the lines between financial tech and sovereign monetary policy. 

Officials also cited risks related to capital supervision and potential overlap with China’s central bank digital currency (CBDC), the e-CNY.

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