The Financial Services Agency in Japan is set to require cryptocurrency exchanges to maintain liability reserves to protect against hacks or unforeseen events. This decision follows recent global exchange hacks. Japan has about 12 million crypto accounts, with a population of 123 million, making it a high concentration area for crypto users.

A yen-pegged stablecoin, JPYC, was launched by a Tokyo-based fintech firm in October. The stablecoin is backed one-to-one by bank deposits and government bonds. Japanese regulators banned stablecoin issuance by non-banking institutions in 2022, but signaled approval for the first yen-backed token by 2026. Major financial institutions in Japan are exploring their own stablecoins.

Read more at CoinTelegraph: Japanese Watchdog to Require Exchanges to Hold Liability Reserves: Report