Japan’s Financial Services Agency (FSA) is considering allowing banks to hold cryptocurrencies like Bitcoin for investment purposes, a major policy shift from current regulations that ban banks from holding crypto due to volatility risks. The FSA plans to discuss the reform at an upcoming Financial Services Council meeting to align crypto asset management with traditional financial products.

In addition to allowing banks to hold cryptocurrencies, the FSA is also contemplating letting bank groups register as licensed cryptocurrency exchange operators to offer trading and custody services directly. Japan’s crypto market has seen rapid growth, with over 12 million crypto accounts registered as of February 2025, about 3.5 times higher than five years ago.

Three of Japan’s largest banks – Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC), and Mizuho Bank – are collaborating to issue a yen-pegged stablecoin to simplify corporate settlements and reduce transaction costs. Meanwhile, the Securities and Exchange Surveillance Commission in Japan is planning to introduce new rules to ban and penalize crypto insider trading.

Read more at Cointelegraph: Japan’s FSA May Let Banks Hold Bitcoin and Other Cryptocurrencies