Japan May Let Banks Trade Bitcoin in Major Financial Reform

Japan’s Financial Services Agency (FSA) is reportedly considering a landmark reform that would permit banks to acquire and trade digital assets such as Bitcoin. Once this latest reform is passed, this will be a major policy shift in the financial strategy for Japan and Asian crypto industry.

According to Yomiuri, a Japanese newspaper, the new system will enable banks to handle cryptocurrencies and other digital assets in the same way government bonds and stocks. The aim of the FSA is to integrate digital asset in Japan’s regulated banking sector. The goal behind this new reform is to prevent unnecessary risk exposure, ensure financial stability, and maintain security.

The possibility of registering banking groups as "cryptocurrency exchange operators" is another option the agency is considering.  By doing this, big banks would be able to offer their clients direct trading and exchange services, giving investors a safe and regulated way to acquire digital assets.  The Financial Services Council, which advises the prime minister of Japan, is anticipated to examine the proposal at its next meeting.

If approved, the reform would mark a sharp departure from the FSA’s 2020 guidelines, which prohibited Japanese banks from holding cryptocurrencies for investment purposes. It also aligns Japan more closely with global trends, as several Western financial institutions, including those in the U.S., have recently expanded into Bitcoin and other digital asset offerings.

Japan’s renewed interest in cryptocurrencies comes at a time of mounting economic pressure. The country’s debt-to-GDP ratio has soared to around 240%, among the highest in the world. Economists warn that this unsustainable debt could lead to long-term financial repression through persistent low interest rates, higher inflation, and tighter regulations. In such an environment, digital assets like Bitcoin could become an appealing alternative for investors seeking protection from currency devaluation and traditional market constraints.