Japanese Parliament Passes Revised Payment Services Act for Crypto

Japan’s House of Councillors has approved a revised Payment Services Act establishing a new regulatory framework for Cryptocurrency Exchange Service Providers.

This amendment enhances investor protections and aligns Japan with global standards, indicating increased regulatory clarity for crypto assets. The Japanese government, led by the Ministry of Finance and Financial Services Agency, passed new regulations that lower barriers for stablecoin issuers. This move supports the broader exchange operations and introduces direct refund options for users in the event of business failures.

• Key stakeholders involved include Akihisa Shiozaki, who is advocating for crypto’s classification changes, and Katsunobu Kato, considering adjustments in line with the 2025 Tax Reform Outline. Their actions underscore a significant shift towards tighter regulation and market openness.

“We are discussing the matter in line with the 2025 Tax Reform Outline, and are considering the necessary legal arrangements. The Financial Services Agency will verify the system regarding crypto assets by June of this year.” — Katsunobu Kato, Finance Minister, Japan

Major industry impacts include increased confidence among investors and business expansions for crypto asset intermediaries. This regulatory update is expected to enhance the adoption of stablecoins, benefiting both issuers and consumers.

The Clear Regulatory Stance:

The clear regulatory stance might attract more institutional investors, potentially influencing financial products like ETFs. Historical trends in Japan show a focus on risk mitigation following past exchange collapses, ensuring enhanced consumer protection.

Projected Outcomes

Projected outcomes suggest stabilized markets with a likely increase in stablecoin use. As Japan strengthens its compliance regime, the framework may spur innovation, aligning with practices in the U.S. and E.U.