Japan’s Financial Services Agency is preparing to allow banks to enter new cryptocurrency ventures they have never been able to pursue before. The regulator plans to introduce a proposal that would allow banking groups to buy and hold digital assets like Bitcoin as investments, marking a marked shift in how traditional financial institutions can deal in cryptocurrency.
Plenty of Changes
The FSA is considering regulations that would allow banking groups to register as cryptocurrency exchange operators. This change would enable them to offer trading and exchange services directly to customers, a function currently performed by specialized crypto platforms. The Financial Services Agency believes that involving trusted banking institutions will make the overall environment for individual investors safer and more reliable. For those looking to invest in cryptocurrencies like Dogecoin, it could mean more trustworthy platforms, especially when choosing the best wallets to buy Dogecoin. Currently, many investors are turning to independent exchanges to buy various memecoins and other cryptocurrencies. However, with this new proposal, banks could provide an additional layer of security and familiarity for customers.
Investors could use their existing banking relationships to buy and store digital assets in a regulated environment, making the process smoother and more integrated with traditional financial systems. This change aims to offer both security and convenience, especially for users seeking popular cryptos.
This proposal will be discussed in one of the upcoming Financial Services Council working group meetings. If approved, it is expected to align cryptocurrency investments with more traditional financial products, such as stocks and bonds, with added regulations to ensure a stable and secure investment environment.
Banking Groups to Compete with Existing Exchanges.
At present, banking group subsidiaries are restricted under the Banking Act, which prevents them from being registered as a Crypto Asset Service Provider. The proposed changes would allow securities subsidiaries of banking groups to provide these services, putting them on equal footing with competitors already in the market.
Currently, the Japanese crypto exchange market is dominated by affiliates of securities companies. Companies such as Rakuten Wallet (operating through Rakuten Securities) and SBI Holdings units have significant control over the marketplace. But the new regulatory framework, which permits bank-affiliated securities firms to enter the marketplace, could disrupt current market dynamics and ultimately lead to higher-quality products and services for consumers.
The FSA recognizes that one of the primary risks associated with cryptocurrencies is their price volatility. So, in an effort to protect retail investors, the FSA has stated its intention to require bank-affiliated securities firms to clearly explain the possibility of losing large sums of money before customers start trading.
Increased Adoption Drives Regulatory Evolution
Japan’s crypto market has become one of the largest in the world over the last few years. The total number of crypto accounts registered in Japan exceeded 12 million in February of 2025, an increase of 3.5 times in five years. This level of growth clearly shows that public interest in this area is much greater and that regulatory agencies are becoming more favorable toward the new industry.
The statistics show a more dramatic increase in what is actually happening in practice, as measured by on-chain activity. For example, from July 2024 to June 2025, Japan saw an on-chain value received increase of approximately 120% year over year, according to Chainalysis. This produced the best overall record of any of the five largest areas in Asia Pacific for crypto adoption, further showing that regulatory clarity can drive real growth.
The FSA is working to finalize its all-encompassing crypto trading rules and expects to have them in place by the end of 2025. It has been taking steps to combat crypto insider trading through surcharge orders that require guilty parties to make good for any illegal profits.
Economic Forces Shape Crypto Policy
Japan’s changing attitude toward cryptocurrency comes as the country faces serious economic problems. Its national debt has risen to nearly 240% of GDP, raising concerns about the potential onset of inflation and financial instability. This extraordinary burden of debt is likely forcing government authorities to seek alternative economic systems and asset classes.
The government has already begun moving to embrace digital assets in other forms. Japan has issued its first yen stablecoin; the Currency Board of Japan approved its issuance in October 2025. The token is designed for transactions, from international money transfers to corporate payments, showing that crypto can be used for more than speculation.
The issue of Bitcoin as a treasury asset has also made a fine showing in Japanese corporate acquisitions. Metaplanet leads this effort as the most active in Bitcoin acquisitions, having acquired 30,823 BTC, making it the fourth-largest corporate holder of Bitcoin in the world. Recently, five Japanese corporations have announced new acquisitions, adding 156.79 BTC to their holdings.
All these corporate acquisitions and changes in FSA regulation suggest that Japan is making an effort to position itself as a leader in incorporating cryptocurrency into its respected financial system. The proposed changes are said to give banks the power to meet growing customer demand while retaining oversight to protect investors from crypto’s inherent volatility.
