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Japan’s Financial Services Agency (FSA) is preparing new rules that would require domestic crypto exchanges to hold liability reserves, according to Nikkei Asia. The proposal aims to strengthen user protection by ensuring exchanges can compensate customers if losses occur from hacks or system breaches. Japan already mandates that customer assets be stored in cold wallets, but current law does not require dedicated reserves. The FSA expects to submit the bill to parliament next year.
Recent industry shocks continue to motivate tighter safeguards. In 2024, local platform DMM Bitcoin suffered a major breach worth roughly $312 million, traced to a trading management partner. Regulators are also pushing a registration system for third-party custodians and service providers, expected to be submitted during the 2026 Diet session.
Japan is simultaneously advancing crypto-friendly reforms. The FSA is considering reclassifying digital assets under the Financial Instruments and Exchange Act and lowering capital-gains tax on crypto to a flat 20%. Major banks are exploring yen-backed stablecoins, and leading asset managers, including MUFG and Daiwa, are preparing the country’s first crypto investment trusts.
