Nikolas Sargeant
The Japanese government has approved significant reforms to its crypto regulations, focusing on brokerages and stablecoins. The Cabinet's decision amends the Payment Services Act, which is now set to be finalized by Japan's National Diet. These changes will streamline the licensing process for crypto companies and offer new flexibility for stablecoin issuers, signaling a progressive shift in the country’s crypto regulations. The amendments are expected to pass easily through the Diet, which has historically supported crypto-related legal changes backed by the Cabinet.
One of the most notable reforms is the shift in the regulatory framework for crypto brokerages. Under the new rules, crypto companies will be classified as “intermediary businesses” rather than requiring the same permits as exchanges or wallet operators. This change is designed to lower the barriers to entry, with brokerages no longer subject to strict financial and anti-money laundering regulations, as long as they do not handle client funds directly. Some of Japan’s major companies, including Mercari, SBI Securities, and Monex Securities, are already exploring brokerage operations.
The amendments will also bring changes to the way stablecoin issuers can back their coins. Currently, stablecoins must be fully backed by cash deposits in regulated bank accounts. The new law will allow issuers to use assets such as short-term government bonds, including Japanese and U.S. bonds, to back their coins. However, only bonds with a maturity of three months or less can be used, and a maximum of 50% of a stablecoin issuer’s backing can come from bonds, with the rest held in liquid accounts.
These changes are expected to have a significant impact on Japan's rapidly evolving crypto market, making it easier for companies to operate and providing more flexibility for stablecoin issuers. Additionally, the Japanese government is considering opening up a strategic Bitcoin reserve. The government's move reflects its continued commitment to fostering growth in the digital asset sector while ensuring stability and compliance with financial regulations.
