Regulators explore a major policy shift that could integrate crypto into Japan’s traditional banking system
Japan’s top financial regulator is reportedly weighing a proposal to let domestic banks buy, sell, and hold cryptocurrencies, a move that could mark one of the country’s most significant shifts toward mainstream digital asset adoption.
According to local media reports, the Financial Services Agency (FSA) plans to discuss reforms to supervisory guidelines that currently prevent banks from holding volatile digital assets. The potential update aims to establish a regulated framework enabling banks to trade crypto similar to stocks or government bonds, while ensuring strong oversight and risk controls.
“Allowing banks direct participation in the crypto market could bridge the gap between traditional finance and digital innovation,” said a Tokyo-based financial policy analyst. “But the FSA will need to balance market access with systemic stability.”
The FSA’s Financial Services Council, an advisory body to Japan’s Prime Minister, is expected to review the proposal in its upcoming meeting. Officials are also considering rules that would allow banks to register as licensed crypto exchanges, a move designed to give retail investors a safer, more trusted avenue for digital asset trading.
If approved, the changes could reshape Japan’s financial landscape. Banks would gain the ability to offer crypto trading, custody, and brokerage services directly, rather than relying on third-party exchanges. This would also strengthen investor protection, given that Japanese banks operate under strict compliance and capital requirements.
In parallel, the FSA reportedly plans to introduce new regulations banning insider trading of digital assets, explicitly prohibiting market activity based on non-public information. Violators could face financial penalties proportional to their illicit profits.
“Japan has long been at the forefront of crypto regulation,” said another policy researcher familiar with the discussions. “This move reflects a maturing approach — one that integrates innovation into the core of its banking system while maintaining robust oversight.”
As Japan’s policymakers debate the proposal, the outcome could set a regional precedent for how traditional financial institutions engage with the fast-evolving crypto economy.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.