Japan’s financial regulator has opened a public consultation on proposed rules governing reserve assets for stablecoins, marking another step in the country’s effort to modernize oversight of digital payments.
The initiative follows legislative changes scheduled to take effect in 2025 and reflects Tokyo’s cautious but increasingly structured approach to crypto-linked instruments.
In a statement issued Monday, the Financial Services Agency said it had released draft regulatory notices connected to amendments to the Payment Services Act enacted last year.
The revisions, adopted as Act No. 66 of 2025, updated Japan’s legal framework for settlement services and electronic payment instruments. The draft notices clarify how reserve assets may be managed for stablecoins issued through trust-based arrangements, formally known as specified trust beneficiary interests.
Under the proposals, issuers using these structures would be required to follow clearer investment parameters for reserve management.
The FSA indicated that the notices are part of a broader package also covering administrative processes and supervisory expectations for crypto-related service providers and financial institutions. Public comments will be accepted until Feb. 27, 2026, before the rules are finalized.
One draft notice sets out restrictive criteria for bonds that may be used as collateral for stablecoin reserves. Only certain foreign-issued bonds would qualify, and they must satisfy two conditions simultaneously.
The securities must hold a high credit rating, equivalent to a credit risk classification of one or two from an approved rating agency, and the issuing entity must have at least 100 trillion yen in total bonds outstanding.
The FSA said these thresholds are intended to ensure liquidity and credit quality, reducing the risk that reserve assets could become unstable during market stress.
By limiting eligibility to highly rated and widely issued instruments, regulators aim to reinforce confidence in regulated stablecoins operating within Japan’s payments system.
Alongside reserve rules, the agency proposed updated supervisory guidance for banks, insurers and their subsidiaries. A new provision would require subsidiaries offering cryptocurrency intermediation services to clearly explain associated risks to customers.
The draft guidance notes that consumers may otherwise underestimate risk when services are provided under the umbrella of established financial groups.
Additional checks are also proposed for firms seeking to handle foreign-issued stablecoins. Applicants would need to demonstrate that overseas issuers do not target general users in Japan through issuance, redemption or solicitation.
The FSA said it plans to cooperate with foreign regulators to exchange information on issuers and products. The consultation comes as Japan’s stablecoin market gathers momentum, with recent initiatives involving domestic fintech firms and major banks.
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