Key Notes
Japan may soon allow banks to invest in and hold Bitcoin.
The goal is to treat crypto like stocks or bonds.
Japan has over 12 million crypto users as of February 2025.
Japan’s Financial Services Agency (FSA) is considering allowing banks to invest in and hold Bitcoin (BTC) and other cryptocurrencies.
According to local outlet Livedoor News, a working group of the Financial Services Council will review the proposal soon.
If approved, it would signal that digital assets are being integrated into core financial instruments, not seen as speculation. This would allow banks to invest in crypto assets as they currently invest in stocks or government bonds.
The current rules in Japan, which were approved in 2020, ban banks from holding crypto due to volatility risks. Relaxing these rules could open large institutional capital flows into Bitcoin and other digital assets.
According to the report, the new system would include strict risk management and capital safeguards.
Banks will likely face stress-testing and exposure limits to ensure stability while allowing innovation.
The Path to Mainstream Adoption
Japan is considered one of the fastest-growing crypto markets, with over 12 million users — a 3.5 times growth over the past five years.
The rising adoption proves demand already exists; the policy shift would simply formalize what’s happening organically.
The FSA’s latest proposal boosts public confidence as it would help reduce fraud concerns and bring retail users into regulated crypto environments.
In February, the regulator ordered Apple and Google to remove multiple crypto exchanges like KuCoin and Bybit from their app stores.
On Oct. 9, Binance Japan partnered with the Japanese payments provider PayPay after the company acquired 40% of Binance Japan. This was a clear sign of rising demand for digital assets in Japan.
Moreover, the top three Japanese banks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group – have joined forces to issue yen and US dollar-pegged stablecoin to create a unified digital payment ecosystem.
