Japan’s FSA Plans Major Reform to Let Banks Trade and Hold Crypto Assets

Japan’s Financial Services Agency (FSA) is reportedly weighing a landmark shift that could allow domestic banks to directly trade and hold cryptocurrencies, according to a Sunday report from Yomiuri Shimbun.

Currently, Japanese banks are prohibited from owning or transacting in digital assets due to their volatility. However, the FSA is now considering a policy overhaul that would let these institutions treat crypto similarly to stocks and government bonds — a move that could bring digital assets squarely into Japan’s traditional financial system.

The regulator’s plan involves establishing new supervisory frameworks and regulatory safeguards to minimize financial risks. These measures will be discussed at the upcoming meeting of the Financial Services Council, an advisory body to Japan’s Prime Minister.

Beyond permitting crypto trading, the FSA is also evaluating whether banks should be able to register as licensed crypto exchanges. Such a shift could pave the way for retail investors to access digital assets directly through trusted banking institutions, boosting confidence and participation in Japan’s crypto market.

In tandem with these reforms, the FSA is tightening its stance on market integrity. The agency reportedly intends to introduce amendments that explicitly outlaw trading based on non-public information — with financial penalties pegged to the profits gained from insider activity.

If enacted, the reforms would position Japan among the most progressive major economies in integrating crypto into its regulated banking system, potentially setting a global benchmark for digital asset oversight.