> ## Content Index > Fetch the complete content index at: https://www.fintechobserver.com/llms.txt > Use this file to discover other available public pages before exploring further. # FSB Global Regulatory Framework for Crypto-Asset Activities: Japan - URL: https://www.fintechobserver.com/fsb-global-regulatory-framework-for-crypto-asset-activities-japan/ - Published: 2025-10-16T17:16:16.000Z - Updated: 2025-10-16T17:16:16.000Z - Author: Norbert Gehrke - Tags: crypto, cryptocurrency exchange, stablecoin, regulation, supervision, japan The Financial Stability Board (FSB) has published its 100+ page "Thematic Review on FSB Global Regulatory Framework for Crypto-asset Activities," from which we have extracted all information related to the regulatory environment in Japan for Crypto-Asset Activities (CA) and Global Stablecoin Arrangements (GSC). ## Regulatory Framework Summary (Overall Status) Japan is considered to have a **finalized regulatory framework** for both Crypto-asset Activities (CA) and Global Stablecoin Arrangements (GSC), reflecting significant progress in implementation. | Framework | Implementation Status | Legal Basis | | ---------------------------------------- | ---------------------------------------- | --------------------------------------------------- | | **Crypto-Asset Activities (CA)** | Regulatory framework finalised (Stage 5) | Payment Services Act (amended 2016, effective 2017) | | **Global Stablecoin Arrangements (GSC)** | Regulatory framework finalised (Stage 5) | Payment Services Act (amended 2022, effective 2023) | The oversight of crypto-asset exchange services and stablecoin activities is provided by the **Financial Services Agency (FSA)**. Japan adopted the approach of extending existing financial regulations (specifically the Payment Services Act) to encompass crypto-assets, aligning oversight with traditional financial regulatory frameworks. ## 1\. Crypto-Asset Service Provider (CASP) Regulation (CA Recommendations) ### A. Licensing and Scope of Activities Japan’s CASP framework regulates various activities, though coverage varies, sometimes relying on existing laws outside the core crypto-asset framework. ![](https://storage.ghost.io/c/46/cb/46cbd57f-e0e8-41a4-a1e2-710103a4267b/content/images/2025/10/Screenshot-2025-10-17-at-2.10.10.png) ### B. Governance, Risk Management, and Prudential Requirements - **Governance:** Japan focuses on basic governance standards, such as minimum capital and eligibility requirements for management. It mandates the establishment and public disclosure of a conflicts of interest policy. - **Operational/IT Risks:** The framework focuses on specific operational and cyber risks (e.g., secure custody, IT risk management, and reporting blockchain-related incidents, such as deficiencies in wallet security). It does not currently include resilience testing. - **Prudential Requirements:** Japan focuses on foundational requirements, such as **JPY 10 million in minimum capital** for CASPs and secure storage of client assets. ### C. Supervision and Enforcement - **Supervisory Mandate:** Supervision covers internal controls, IT risk management, and governance. - **Exams Conducted:** FSA conducts comprehensive inspections covering internal controls, IT risk management, and governance. - **Data Reporting:** Japan has comprehensive reporting requirements (though non-financial risks are collected on an ad hoc basis) and is able to request data ad hoc from CASPs and third parties. - **Financial Statements:** Quarterly - **Financial Risks:** Monthly - **Non-financial Risks:** Ad-hoc - **Regulatory Compliance:** Quarterly - **Other Reporting:** Ad-hoc ## 2\. Global Stablecoin (GSC) Regulation ### A. Licensing and Structure - **Entities Permitted to Issue:** Apart from banks, only **trust companies** and **funds transfer service providers** are permitted to issue stablecoins, leveraging their payment expertise and infrastructure. - **Bank Issuance:** Banks are allowed to issue balance sheet backed stablecoins (without a dedicated reserve requirement). ### B. Regulatory Requirements - **Risk Management:** Comprehensive. Japan aims to ensure financial stability through strict asset management practices. Stress testing is partially required (mandatory for trust banks, but not for "funds transfer service providers”). - **Redemption:** Issuers must provide redemption **“without delay”** under the Payment Service Act, ensuring prompt action but lacking a defined minimum timeframe. Redemption occurs at face value. - **Stabilisation Mechanisms:** Full Reserve or balance sheet backing. - **Custody of Reserves:** Local custody is required. Japan prohibits stablecoin issuers from self-custodying reserve assets. - **Capital Requirements:** Fixed minimum. Japan requires at least JPY 100 million for trust companies and JPY 2 billion for trust banks. - **Recovery and Resolution:** Partially required (implied, though contingency plans are listed as "None"). Japan’s framework does not establish prudential liquidity requirements in addition to the stabilisation mechanism. ### C. Reserve Collateralisation and Asset Eligibility - **Reserve Collateralisation:** Required to ensure the full amount of trust assets are managed in safe deposits. - **Asset Eligibility:** Japan is one of the only jurisdictions that currently imposes a **minimum amount of deposits** as part of the overall reserve. Reserve assets must be managed entirely in demand deposits or savings with depository institutions that meet soundness standards. - **Government Bonds:** Government bonds are allowed as reserve assets without a specific maturity limit, provided they meet liquidity and safety standards. (Legislative amendments are introducing a maximum maturity limit of three months on government bonds held as reserve assets issued as trust beneficiary rights, capped at 50% of total reserve assets.) ### D. Data, Disclosure, and Reporting - **Public Disclosures:** Governance attributes and redemption rights must be disclosed, but the reserve asset composition is **not specified** publicly. Japan requires regular internal audits, though specific timelines are not outlined. - **Supervisory Reporting:** Reserve asset composition is reported to the FSA. Issuers must notify regulators of any changes to governance structures, reserve management policies, or other critical aspects. ## 3\. Cross-Border Cooperation - **Foreign Stablecoins:** Japan prohibits the circulation or intermediary activities relating to foreign-issued stablecoins unless the foreign issuer obtains the specific requisite “Electronic Payment Instruments Exchange Service Provider” license. - **Cooperation Tools:** Japan is a signatory to the IOSCO MMoU and EMMoU, and the APRC SMMoU (Asia-Pacific Regional Committee Supervisory MMoU). --- [Sony Bank plans stablecoin proof-of-concept with Polygon and SettlemintSony Bank has begun consideration of a proof of concept (PoC) for issuing a stablecoin on Polygon, in collaboration with Polygon Labs and…![](https://storage.ghost.io/c/46/cb/46cbd57f-e0e8-41a4-a1e2-710103a4267b/content/images/icon/Newsletter-Small-210.png)Japan FinTech ObserverNorbert Gehrke![](https://storage.ghost.io/c/46/cb/46cbd57f-e0e8-41a4-a1e2-710103a4267b/content/images/thumbnail/1-SoP3oOvTkO6eYlLhumBsvw.png)](https://www.fintechobserver.com/sony-bank-plans-stablecoin-proof-of-concept-with-polygon-and-settlemint/)