Japan’s Banks May Hold Bitcoin Soon: Financial Services Agency is all Set to Allow Banks to Hold Cryptocurrencies!

Japan’s Financial Services Agency (FSA) is on the verge of transforming the financial regulatory sector by permitting domestic banks to acquire and hold digital assets like Bitcoin.

The latest news from the Japanese media has confirmed that the FSA is reportedly planning to review the existing regulations that allow banks to hold cryptocurrencies like BTC for exclusive investment purposes. The media reports that the initiative could mark a major shift in Japan’s financial landscape and help explore new dimensions in the digital asset sector.

The current guidelines in Japan, which were revised five years ago, effectively ban local banks from holding digital assets like cryptocurrencies due to their extreme volatility and regulatory uncertainty.

Risks Highlighted by Japanese Media 

Prominent Japanese Media, Livedoor News, reported that crypto assets such as Bitcoin, which have no backing, are subject to greater fluctuations in trading prices than stocks and other assets. They stated that holding large amounts of these assets could result in losses in the event of a sudden drop in price, which could worsen a bank’s financial position. They also mentioned that the Financial Services Agency’s supervisory guidelines, revised in 2020, effectively prohibit bank groups from acquiring crypto assets for investment purposes. 

FSA’s Strategy for Safe Crypto Trading

FSA believes that cryptocurrency trading as a financial product has recently expanded both domestically and internationally. The recent initiative from the regulating authority aims to establish a system that allows banks to buy and sell cryptocurrencies in the same way as stocks, government bonds, etc. They are also set to implement certain regulations and guidelines to ensure the financial soundness of banks. The latest reports confirm that the working group is expected to bring up the establishment of a new system for managing the risks associated with cryptocurrencies.

The FSA will also consider permitting bank groups to register as “cryptocurrency exchange operators,” which are essentially required for providing crypto exchange services and trading.

According to the FSA strategy, by allowing highly credible and prominent bank groups to take part, the FSA will create an ideal environment where individuals feel more at ease investing.

Bitcoin and Crypto Can Be a Part of “Diversified Investments.” Says Japan’s Finance Minister!

Japan’s crypto market has grown at an unprecedented rate over the last few years. The latest reports say that there are more than 12 million registered crypto accounts, which is more than triple from five years ago. The administration and inclination towards blockchain technology and digital finance are the prime reasons for this leap, and the newly elected government under Sanae Takaichi is on the verge of exploring new areas of digital asset management.

Katsunobu Katō, Japan’s Minister of Finance, has endorsed the idea of adding Bitcoin and other cryptocurrencies to make a part of a diversified investment portfolio. He discussed at the Web3 Conference WebX in August 2025 in Tokyo that the high volatility risk of crypto assets, and stressed that by creating a proper investment environment, they could serve as a valuable diversification option within portfolios. The directional change of Japan’s administration showed the early signs of the country’s shift towards the crypto space, and currently, the FSA’s decision shows Japan is actively considering digital assets for the future. 

Prime Minister’s Initiative Could Boost Japan’s Crypto Hub Potential

The latest reports suggest that Japan’s newly elected prime minister, Sanae Takaichi, might open the door for more “refined” regulations to enhance the country’s cryptocurrency and digital economy. The crypto experts claim that the new initiative from the Japanese Prime Minister could make Japan the next global hub for crypto companies. Sanae Takaichi, Japan’s first female prime minister, could introduce more technological experiments, including advanced blockchain innovation, and she plans to do it without compromising the country’s regulatory standards. 

Elisenda Fabrega, general counsel at Brickken, stated that

(Takaichi’s election may have a) “material impact on the perception and governance of digital assets within the country.”

She mentioned that in previous public positions, Takaichi had expressed support for “technological sovereignty,” including the “strategic development of digital infrastructure, including blockchain technology.” Fabrega added that from a legal perspective, this suggests that Takaichi’s administration may adopt a posture that is not only permissive but potentially proactive in promoting the digital economy.

She noted that Takaichi’s political positioning may strengthen “Japan’s commitment to legal certainty in the crypto space” and renew interest in the country as an innovation-friendly crypto hub.