Japan’s Cabinet has approved a proposal to amend the Payment Services Act, paving the way for more flexible stablecoins and crypto brokerages regulations.
The bill, submitted to the National Diet on the same day of approval, could lower entry barriers for crypto firms in Japan, according to a press release from the Financial Services Agency (FSA).
The approval indicates an important stage in Japan’s legislative process. A bill must receive a majority vote from the Cabinet, with the Prime Minister facilitating consensus. After being submitted to the National Diet, the bill goes through committee reviews, debates, and potential amendments before a vote in both houses. If approved, it is then sent to the Emperor for ceremonial promulgation to become law.
The proposed amendment includes a provision to expand collateral options for stablecoins. Instead of relying solely on cash deposits in regulated bank accounts for a 1:1 backing, issuers could back stablecoins with short-term government bonds and fixed-term deposits, capped at 50% of the backing assets. Only bonds with a remaining maturity of three months or less would be eligible under the new framework.
The bill proposes a dedicated regulatory category for intermediary crypto businesses, distinguishing them from cryptocurrency exchanges. It aims to establish separate licensing and compliance requirements for brokerages, which currently face the same regulations as exchanges. The changes would create tailored anti-money laundering obligations for crypto intermediaries, potentially enhancing market flexibility and encouraging more crypto firms to join Japan’s regulated digital asset ecosystem.
Notably, Japan’s Financial Services Agency (FSA) is reportedly considering classifying cryptocurrencies as financial products similar to securities. They have started private consultations to review the existing regulatory framework and aim to share their policy direction by June, seeking feedback from the Financial System Council during its fall meeting. A potential legal amendment might be proposed in 2026, although the timeline is still uncertain.
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