Key Notes
- The Financial Services Agency in Japan wishes to tighten rules around crypto lending.
- It plans to limit investment for Initial Exchange Offerings (IEOs) without financial audits.
- FSA is considering allowing banks to invest in and hold Bitcoin and other cryptocurrencies.
The Financial Services Agency (FSA) in Japan is planning to tighten the rules around cryptocurrency lending.Notably, this move will bring the crypto service under the Financial Instruments and Exchange Act. Japan is considering this action in a bid to protect investors and their investments.
New Rules for Crypto in Japan
Wu Blockchain announced on X that Japan’s Financial Services Agency has discussed plans to tighten regulations around crypto lending.
Japan’s Financial Services Agency (FSA) discussed plans to tighten regulations on crypto lending, bringing it under the Financial Instruments and Exchange Act to close existing loopholes and mandate stronger risk and custody controls. The agency also proposed investment limits…
— Wu Blockchain (@WuBlockchain) November 7, 2025
Before now, some entities have consistently bypassed registration under the guise of borrowing. By taking this new step, the agency is attempting to close existing loopholes in the growing digital asset ecosystem.
Also, this is an avenue for the FSA to mandate stronger risk and custody controls. To also check the market, the agency has equally proposed investment limits for Initial Exchange Offerings (IEOs) without financial audits. It believes that this move will go a long way in curbing retail speculation. It is confident that it would curb excessive investment this way.
Unfortunately, experts do not entirely agree, as they warned that such caps could be easily bypassed in secondary markets.
Noteworthy, the FSA may also focus on boosting risk management for re-lending and pledging. It could ensure asset segregation and mandate risk disclosure. Clearly, Japan is committed to strengthening the security and transparency of the crypto market in its region.
Japan Becomes Crypto Haven
In addition, the FSA is considering allowing banks to invest in and hold Bitcoin (BTC) BTC $99 552 24h volatility: 3.0% Market cap: $1.98 T Vol. 24h: $81.13 B and other cryptocurrencies. This means that digital assets will be integrated into core financial instruments. Ultimately, the new system would include strict risk management and capital safeguards.
Meanwhile, the entry and expansion of several crypto-related businesses into Japan is a strong reflection of the advancement in the country’s digital asset sector. On Oct. 28, TIS Inc., a publicly traded IT services company that provides infrastructure for Japan’s major financial institutions, launched a multi-token platform in collaboration with blockchain developer Ava Labs.
This service is significant as it enables banks to issue and manage stablecoins and security tokens. Precisely, the system supports ERC20 token standards and includes key management infrastructure for financial-grade security.
