- Japan’s FSA opened a public consultation on rules for bonds eligible as stablecoin reserve assets.
- Only highly rated foreign bonds from major issuers would qualify, tightening risk controls.
- The move supports stablecoin innovation while enforcing strict safeguards and oversight.
Japan is moving another step closer to tightening and formalizing its stablecoin framework. The Financial Services Agency (FSA) has launched a public consultation on draft guidelines that outline which bonds can be used as reserve assets for regulated stablecoins under its planned 2025 payments law update.
This move is part of changes to the Payment Services Act as Japan makes efforts to support digital payment innovation while maintaining strong financial safeguards.
New Rules for Stablecoin Reserve Assets
The proposal focuses on new rules for reserve assets held by stablecoin issuers operating through trust structures, known in Japan as “specified trust beneficiary interests.”
Under the draft FSA guidelines, only a limited range of foreign-issued bonds would qualify as reserve assets. These bonds must meet two main conditions:
- They must have a high credit rating (credit risk category 1–2 or better),
- The issuer must have at least ¥100 trillion (about $648 billion) in outstanding bonds.
In other words, regulators aim to ensure stablecoin reserves are backed by highly liquid and reliable assets, reducing both credit and liquidity risks.
Tighter Oversight for Crypto Intermediaries
Alongside reserve rules, the FSA has released updated supervisory guidelines for banks, insurance companies, and their subsidiaries that provide crypto-related services.
A newly introduced clause requires subsidiaries that offer cryptocurrency intermediation to clearly explain the risks to customers. The aim is to prevent users from assuming a crypto product is low-risk simply because it is offered by a well-known financial group.
Additional Checks for Foreign Stablecoins
The draft also rules add new requirements for companies looking to handle foreign-issued stablecoins in Japan. Applicants must show that the overseas issuer is not issuing, redeeming, or marketing stablecoins to general users in Japan.
The FSA also plans to work more closely with foreign regulators to share information on stablecoin issuers and their products.
Public Consultation Runs Until February 2026
The consultation will stay open until February 27, 2026, and supports Act No. 66 of 2025, passed in June 2025, to update Japan’s rules for payments and electronic settlement instruments. After the consultation ends, the final rules will be published and enforced once administrative steps are completed.
This regulatory push comes as Japan steps up efforts to build a stablecoin market that is both compliant and friendly to institutions. In October, fintech firm JPYC launched what it called Japan’s first legally recognized yen-backed stablecoin.
Meanwhile, the country’s three megabanks, MUFG, SMBC, and Mizuho, are testing stablecoins and tokenized deposits for payments and interbank settlement, with formal FSA backing since December.
Overall, the consultation underscores Japan’s approach to support stablecoin innovation, but only under strict rules designed to protect users and maintain financial stability.
Related: Japanese Fintech Firm JPYC Launches Country’s First Legally Recognized Yen Stablecoin
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