The Japanese Financial Services Agency plans to allow banks to acquire and hold Crypto Assets for investment.

[Japan's Financial Services Agency plans to allow banks to acquire and hold cryptocurrency for investment] The Financial Services Agency (FSA) of Japan is preparing to review relevant regulations and may allow banks to acquire and hold cryptocurrencies such as Bitcoin for investment purposes. This would be a significant policy shift, as the current regulatory guidelines prohibit banks from holding cryptocurrencies based on fluctuation risks since their revision in 2020. The FSA plans to discuss this reform at a Financial Services Commission meeting, aiming to align the management of digital assets with traditional financial products like stocks and government bonds, while also exploring a framework for managing crypto-related risks. If approved, there may be capital and risk management requirements before allowing banks to hold digital assets. Additionally, the FSA is considering allowing banking groups to sign up as licensed “crypto asset exchange operators” to provide trading and accomplice services. Japan's crypto market is growing rapidly, and the FSA sought in early September to transfer crypto regulation from the Payment Services Act to the Financial Instruments and Exchange Act to enhance investor protection. Meanwhile, Japan's three major banks are collaborating to issue a yen-pegged stablecoin, and the Securities and Exchange Commission plans to introduce new regulations to prohibit and penalize insider trading in crypto.