Japan Tightens Crypto Regulations with Mandatory Reserves and Asset Reclassification
Japan's Financial Services Agency (FSA) is spearheading a regulatory overhaul that would force cryptocurrency exchanges to maintain liability reserves—a move designed to protect users from exchange failures and hacking incidents. The proposed rules mark a significant shift toward treating digital assets as speculative investment vehicles rather than payment instruments.
The FSA's draft framework would mandate reserves to cover potential losses, addressing vulnerabilities in the current system that relies primarily on cold wallet storage. This comes amid growing concerns about sophisticated cyberattacks targeting crypto platforms.
Simultaneously, regulators are considering reclassifying major cryptocurrencies under stricter financial product guidelines. The dual approach reflects Tokyo's recognition of crypto's evolution into a mature asset class requiring traditional market safeguards.
