Japan’s Financial Services Agency (FSA) is considering a new system that would require digital asset custodians and trading management services to notify and register with authorities prior to offering their services to crypto exchanges.
According to a report from Nikkei, a working group under the Financial System Council, an advisory body to the Japanese Prime Minister, discussed the subject on Nov. 7.
Under current regulations, crypto exchanges are required to maintain robust management of deposits, including storing user assets in cold wallets. However, Nikkei noted that no comparable rules exist for third-party service providers that work with exchanges.
The FSA plans to mandate that custody and trading services providers register with authorities and that exchanges use only systems provided by those registered custodians. This aims to address security loopholes that could lead to thefts or system failures, the report said.
Nikkei especially pointed out the DMM Bitcoin hacking incident in 2024, where around 48.2 billion yen ($312 million) worth of bitcoin was drained. The hacker’s entry point was identified to be Tokyo-based software firm Ginco, to which DMM had outsourced its trading management.
According to the report, most members of the working group supported the proposed new system, calling for greater clarity in digital asset regulations.
The FSA plans to soon compile a report based on these discussions and aims to submit amendments to the Financial Instruments and Exchange Act during the 2026 ordinary Diet session, the report said.
Meanwhile, the FSA has been accelerating efforts to promote local stablecoin projects. Last month, the FSA approved the country’s first yen-pegged stablecoin, JPYC, which launched soon after.
Last week, the agency announced that it will support a stablecoin pilot project involving Japan’s three major banks — Mizuho Bank, MUFG, and SMBC.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Trade Crypto On Coinhub Exchange
Trade Crypto On Coinhub Exchange
Stay ahead of the market by turning news insights into trading opportunities. With Coinhub Exchange, you can seamlessly buy, sell, and manage your digital assets, all in one secure platform. Take advantage of real-time market insights, deep liquidity, and fast execution for your favorite cryptocurrencies. Don’t just read about it — trade crypto now!
Disclaimer
The content of this article shown by Coinhub News, powered by The Block, is for informational purposes only and should not be construed as financial, legal, tax, or investment advice. Coinhub News and its affiliates are not a licensed financial advisor, legal advisor, broker, or tax advisor, and ... should not be considered as professional advice or a recommendation to engage in any specific investment, legal decision, or financial transaction. Cryptocurrency markets are highly speculative and volatile. Readers should perform their own independent research and consult with a qualified professional before making any financial or legal decisions. The opinions expressed in this article are those of the author and do not necessarily represent the views or opinions of the Company of its affiliates. Additionally, the Company does not make any representations or warranties regarding the accuracy, timeliness, reliability, or completeness of any information in this article. By accessing this content, you acknowledge that any reliance on the information contained in this article is solely at your own risk. The Company is not responsible for any financial losses, legal disputes, or other damages that may arise from reliance on this content or from any investment or legal decisions based on the information provided. Investing in cryptocurrencies involves substantial risks, including the risk of losing your entire investment, and you should carefully consider whether it is appropriate for your circumstances.
Read more
