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- Japan’s FSA may let banks hold Bitcoin, marking a policy shift amid rising crypto adoption and pressure from economic instability.
- Major banks eye yen-backed stablecoin launch as crypto accounts surge past 12 million, signaling strong retail and institutional interest.
Japan’s Financial Services Agency (FSA) is reviewing a proposal that could reshape its banking investment structure by allowing financial institutions to buy and hold cryptocurrencies like Bitcoin. If this reform is approved, it will replace the 2020 guideline that prohibited banks from investing in digital assets due to volatility risks.
The initiative will be discussed at the upcoming Financial Services Council meeting, an advisory body to the Prime Minister. The proposal aims to treat cryptocurrencies similarly to stocks and government bonds, creating a regulated path for banks to participate in the crypto market.
The move shows Japan’s gradual shift toward mainstream crypto adoption. Its financial system is becoming more in line with global trends. The US and many European markets have already started adding digital assets to their banking systems.
FSA May Register Banks as Crypto Operators
Under the new plan, the FSA may also allow large banking groups to register as “cryptocurrency exchange operators.” This would let major financial institutions provide trading and custody services directly, which could strengthen investor confidence through regulated institutions
Regulators are expected to set rules for capital and risk management before allowing banks to hold crypto assets. These safety steps aim to protect financial stability from sudden changes in crypto prices.
The country is becoming more open to cryptocurrencies amid severe economic pressure. Its debt compared to its total total GDP has reached about 240%, one of the highest levels in the world.
Economic experts believe that this pressure could push policymakers to take measures that control financial pressure, such as keeping long-term interest rates low and enforcing stricter rules.
In the current environment, cryptocurrencies are becoming an option for investors seeking protection against inflation and government debt risks. Bitcoin reached a new record high of $126,000 on October 6, strengthening its appeal among market participants.
Crypto Adoption in Japan Triples in Five Years
As of February 2025, Japan had more than 12 million registered crypto accounts, 3.5 times higher than five years ago, data from the FSA show. The steady rise suggests that digital assets are becoming a standard part of household and institutional investment portfolios.
Finance Minister Katsunobu Kato recently commented on this shift. “While crypto assets carry the risk of high volatility, by establishing a proper investment environment, they can become an option for diversified investment,” he said in late August.
At the same time, the country’s largest banks—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking Corp., and Mizuho Bank—are collaborating to issue a yen-backed stablecoin. The initiative aims to simplify corporate settlements and cut transaction costs.
At present, Bitcoin trades around $111,279, up 4.3% in 24 hours, with trading volume climbing 90% to 60.84 billion.
Analysts have noticed a drop in Bitcoin’s “Realized Value to Transaction (RVT)” ratio, which is usually linked with bullish cycles. According to the analytics firm Alphractal,
Historically, strong declines in the RVTS have preceded major bull phases, as they indicate that Bitcoin is being used, accumulated, and transferred — not just held.
