Japan May Let Banks Hold Crypto Under New FSA Proposal

Written by Aaron S.,

Editor-In-Chief

Last Updated: October 20, 2025

Key Takeaways

Japan’s FSA is considering changes to let banks hold cryptocurrencies like Bitcoin, which reverses a 2020 ban tied to volatility concerns;
If approved, banks must meet capital and risk controls before being allowed to invest in or manage digital assets;
The FSA may also permit banks to run crypto exchanges as Japan’s crypto user base passes 12 million accounts.

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Japan's main financial regulator is reviewing rules that currently prevent banks from owning cryptocurrencies like Bitcoin BTC $111,219.01 .

According to an October 19 report from Livedoor News, the Financial Services Agency (FSA) is considering allowing banks to treat crypto assets more like regular investments such as stocks and bonds.

Currently, banks in Japan are not allowed to hold cryptocurrencies. This restriction was put in place in 2020 due to concerns over large price swings and the risks they could pose to financial institutions. However, the FSA is thinking about updating these rules.

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The topic is expected to be discussed at an upcoming meeting of the Financial Services Council, a group that advises the Prime Minister on financial policy.

If the FSA approved, banks would likely need to meet certain conditions, including capital and risk management standards, before being allowed to hold cryptocurrencies.

In addition to letting banks hold crypto, the FSA is also looking at whether bank groups should be allowed to operate as licensed cryptocurrency exchanges. This would mean banks could offer crypto trading and custody services directly to their customers.

The possible changes come at a time when Japan’s crypto market is growing. As of February 2025, more than 12 million cryptocurrency accounts had been registered.

On October 15, the Bank of England confirmed that its planned restrictions on stablecoin usage are not meant to last. What did Deputy Governor Sarah Breeden say? Read the full story.