Japan’s top regulator is reportedly weighing a policy change that would let banks offer Bitcoin custody and trading services.
Japan Considering Allowing Banks To Offer Crypto-Related Services
As reported by Japanese newspaper Yomiuri, Japan’s Financial Services Agency (FSA) is considering allowing banks to acquire and hold digital assets like Bitcoin for investment purposes.
This reform, if enacted, would change the banking landscape in the East Asian nation. Currently, banks are prohibited from making cryptocurrency acquisitions for the purpose of investments under FSA guidelines introduced in 2020.
Under the new regulation, banks would be able to trade Bitcoin and other digital assets in a similar way to stocks and government bonds. There would also be certain safeguards to ensure the institutions’ financial stability.
This isn’t the only rule change the FSA is looking at. According to the report, the regulator is also discussing permitting banking groups to register as “crypto exchange operators.” As these exchange operators, they will be able to offer digital asset trading and exchange services directly to customers.
The intent behind the move is to make it easier for retail investors to participate in the cryptocurrency sector through institutions that are well-regulated and highly credible.
The reform will be taken up in the next working group meeting of the Financial System Council, a government advisory panel under the Prime Minister. Whether the rule change will ultimately come to pass remains to be seen.
In some other news, Beijing has put a roadblock on Hong Kong’s stablecoin plans, according to the Financial Times. Hong Kong launched its stablecoin legislature earlier this year, making it so that institutions seeking to issue fiat-tied cryptocurrencies in the region have to obtain a license from the Hong Kong Monetary Authority (HKMA)
Several high profile names like Ant Group and JD.com had lined up to register with HKMA, with the first batch of licenses expected to arrive next year. It seems, however, that the tech giants have now put their plans on ice after Chinese regulators urged them not to move ahead, raising concerns about the rise of currencies controlled by the private sector.
While China continues to be cautious about stablecoins, the rest of the world has been moving forward in adoption of these digital assets, including other Asian countries. According to a Friday report, three major Japanese banks are preparing to issue a yen-backed token before the end of the year.
Separately, an earlier report from August noted that four major South Korean financial institutions were in talks with Tether and Circle, the issuers of the two largest stablecoins, USDT and USDC.
Bitcoin Price
Bitcoin has seen a jump of around 3% over the past day, recovering back above the $110,600 mark.
Around $139 million in liquidations on derivatives exchanges have accompanied this Bitcoin surge.
