Japan’s FSA releases draft rules on reserve assets for stablecoins…public comment period under way

Japan’s financial authorities have begun procedures to spell out criteria for the composition of reserve assets backing yen-pegged stablecoins. Market participants expect that, as the regulatory framework takes shape in earnest, the issuance and distribution structure for stablecoins in Japan will become clearer.

According to The Block, a crypto-focused media outlet, the Financial Services Agency (FSA) will solicit public comments through the 27th of next month on a draft that stipulates which types of bonds can qualify as stablecoin reserve assets. The aim is to clarify the permitted scope of investment for “beneficial interests in specified trusts” used by stablecoin issuers.

In the draft, the FSA strictly limits which bonds can be included as stablecoin reserve assets. Among foreign-issued bonds, only those with a credit-risk rating of at least level 1–2 as classified by credit rating agencies would qualify, and only if the issuer’s total outstanding issuance is at least 100 trillion yen. In effect, the eligible universe is largely confined to major sovereign bonds and top-tier debt.

The proposal is a follow-up measure to implement amendments to the Payment Services Act (Act No. 66) enacted in June 2025. The revised law includes provisions to overhaul electronic payment instruments and the broader payments infrastructure, laying the legal foundation for incorporating stablecoins as regulated payment instruments.

The FSA also revised supervisory guidelines for banks, insurers and their affiliates. If an affiliate provides crypto intermediation services, it imposes robust disclosure obligations so users do not underestimate risks simply because the provider belongs to a traditional financial group—seeking to sharpen risk awareness around stablecoins and crypto services.

In addition, requirements were tightened for businesses seeking to handle stablecoins issued overseas. Applicants must explain that the overseas issuer does not conduct issuance, redemption or solicitation activities targeting general users in Japan. The FSA said it will also share information with foreign supervisory authorities on related matters.