Japan’s FSA Shakes Up Crypto: Public Input Sought on New Stablecoin Reserve Bond Rules

Japan's financial watchdog just threw a new rulebook on the table—and it's all about making stablecoins, well, stable.

The Bond Play

The Financial Services Agency (FSA) is floating a proposal that would force stablecoin issuers to back their digital promises with something more tangible than hope. We're talking reserve bonds—a safety net of high-quality, liquid assets held in trust. The goal? To ensure that when you hold a 'stable' coin, it doesn't turn into a speculative rollercoaster ride. No more backing your digital dollar with memes and prayers.

Why This Matters Now

This isn't just bureaucratic shuffling. It's a direct response to the ghost of collapses past, where 'fully backed' turned out to be a creative accounting term. By mandating these bonds, the FSA aims to cut off the path to fractional reserve shenanigans before they start. It’s pre-emptive regulation—trying to build the guardrails before the next high-speed crash.

The Public Gets a Say

Here’s the twist: they're not just decreeing it. The FSA is opening the floor for public comment, a move that invites both crypto natives and traditional finance skeptics to shape the final rules. It’s a rare moment of collaborative rule-making in a sector usually governed by reactionary crackdowns.

Will this finally give stablecoins the boring, reliable reputation they desperately need? Or is it just another layer of financial theater—a bond requirement that makes regulators feel safe while the real risks hide in the plumbing? Only time, and the market's cynical genius for bypassing rules, will tell.

Japan refines its stablecoin rules

Japan’s Financial Services Agency (FSA) has officially opened a public comment period lasting until February 27 regarding the types of bonds that can serve as “supporting assets” for stablecoins.

The government wants to ensure that stablecoins are truly stable as part of the implementation of the “Act to Amend Part of the Act on Fund Settlement,” which was updated in 2025 (Reiwa 7).

The new draft notice specifically targets and clarifies a legal structure used to protect stablecoin holders known as “specified trust beneficiary rights.” By designating exactly which bonds are allowed, the FSA aims to ensure that if a stablecoin issuer faces a sudden demand for withdrawals, consumers can sell their bond holdings quickly without them losing value.

The FSA’s new draft focuses on the quality and liquidity of assets held in reserve. Its full list includes high-grade securities, but the primary focus is on Japanese Government Bonds (JGBs) and other highly rated debt instruments.

Restricting reserves to high-quality bonds creates a “walled garden” for stablecoins in Japan and makes them more like traditional bank deposits than volatile crypto assets.

The public comment period allows industry experts and citizens to weigh in on whether these bond requirements are too strict or just right for the current market. Participants must provide their names and reasons for their opinions.

The FSA has stated that they will not respond to comments individually, and the results will be published alongside their previous findings from late 2025. Once the feedback is reviewed, the new rules will be officially announced and enforced.

Will Japan’s new regulations change the way banks and brokers operate?

Aside from stablecoin legislation, the update also introduces new “Office Guidelines” and “Supervision Guidelines” for a wide range of financial institutions, including banks, insurance companies, and crypto asset service brokers.

As more traditional Japanese firms enter the digital asset space, the FSA is tightening its oversight. For instance, SBI Holdings has been working closely with Circle, the issuer of the USDC stablecoin, to bring regulated dollar-backed tokens to the Japanese market.

Similarly, Mitsubishi UFJ Financial Group (MUFG) has developed its “Progmat” platform, which is designed to issue various stablecoins and tokenized assets. MUFG, along with Mizuho Bank and Sumitomo Mitsui Banking Corp (SMBC), recently received approval for a “proof-of-concept” to test stablecoins for cross-border payments between corporate offices.

The “Supervision Guidelines” specifically address how banks and insurance companies must handle their subsidiaries that deal with crypto assets.

The FSA wants to ensure that the risks of the crypto market do not affect the traditional banking system. For brokers, the new “Office Guidelines” set strict rules for “electronic payment methods,” the legal term Japan uses for stablecoins.

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