**Japan’s Financial Services Agency (FSA) Considers Allowing Banks to Hold Cryptocurrencies**
Japan’s Financial Services Agency (FSA) is reportedly exploring reforms that would permit banks to buy and hold cryptocurrencies such as Bitcoin for investment purposes. According to a recent report from Livedoor, discussions on potential regulatory revisions are expected to begin at an upcoming meeting of the Financial System Council, an advisory body to the Prime Minister.
Regulators plan to introduce rules addressing crypto-related risks, including the volatile price swings that could impact a bank’s financial stability. If approved, the FSA will likely implement capital and risk-management requirements before allowing banks to hold digital assets.
This move marks a significant policy shift. Currently, supervisory guidelines updated in 2020 effectively prohibit banks from investing in cryptocurrencies due to concerns over volatility and potential losses that might affect their financial health. The proposed framework aims to align crypto asset management with traditional investment instruments like equities and government bonds.
**Japanese Banks May Become Licensed Cryptocurrency Exchanges**
In addition to the above, Japan’s FSA is also considering allowing banks to register as licensed “cryptocurrency exchange operators.” This change would enable banks to offer their customers trading and custody services directly.
The financial regulator believes that involving trusted banking institutions in the crypto market could create a safer investment environment for retail investors.
Japan has long been a hub for cryptocurrency. Tokyo was home to the now-defunct major Bitcoin exchange Mt. Gox, which suffered a notorious hack leading to its closure in 2014. Repayments to affected customers only began in early 2024.
The crypto market in Japan continues to grow rapidly, with over 12 million crypto accounts registered as of February 2025 — approximately 3.5 times higher than five years ago.
This potential regulatory shift signals Japan’s commitment to integrating cryptocurrencies more deeply into its financial system while working to ensure investor safety and market stability.
https://zycrypto.com/japans-financial-regulator-considers-allowing-banks-to-trade-and-hold-bitcoin-other-cryptos/
