Japan is preparing new rules for storing crypto assets

Japan's Financial Services Agency (FSA) is considering introducing a new system that would require digital asset custodians and trade management services to notify and register with authorities before offering their services to cryptocurrency exchanges.

Discussion of New Japanese Financial System Regulations

According to Nikkei, a working group under the Financial System Board, an advisory body to the Japanese Prime Minister, discussed the issue on November 7. Current regulations oblige crypto exchanges to ensure secure deposit management, including storing user assets in cold wallets. However, no similar regulations exist for third-party service providers working with exchanges.

FSA Custodian Responsibilities

The FSA plans to introduce mandatory requirements for custody and trading service providers, as well as require exchanges to use only systems provided by these registered custodians. This is aimed at eliminating security vulnerabilities that could lead to theft or system failures. The report mentions the 2024 DMM Bitcoin hack, which resulted in the theft of approximately 48.2 billion yen (US$312 million). The hacker's entry point was Tokyo-based software company Ginco, to which DMM had outsourced trading operations.

Support for the New System in Japan

According to the report, most working group members supported the proposed new system, calling for greater clarity in digital asset regulation. The FSA plans to soon compile a report based on these discussions and intends to submit amendments to the Financial Instruments and Exchange Act during the regular Diet session in 2026.

Promoting Stablecoins

Meanwhile, the FSA has stepped up efforts to promote local stablecoin projects. Last month, the agency approved the country's first project, underscoring Japan's commitment to developing and regulating the digital asset market.

In conclusion

Thus, the new rules being developed by the FSA could significantly change the landscape of cryptoasset storage and management in Japan, providing greater security and protection for users.