Japan Lifts Stablecoin Cap, Paving Way for Institutional Growth

The Financial Services Agency (FSA) in Japan has lifted the stablecoin transaction cap for certain operators, allowing larger transactions and paving the way for broader institutional participation. The previous limit of 1 million yen (approximately $6,700) per transaction had restricted stablecoin usage to small peer-to-peer payments.

The revised Payment Services Act introduced the cap in 2023 as part of a framework to manage risks associated with stablecoins. However, the FSA's decision signals a more flexible approach, allowing funds transfer service providers to handle larger transactions while maintaining consumer protection and financial stability.

The removal of the cap is expected to increase liquidity and deepen the stablecoin market in Japan. The FSA also plans to create a dedicated department for cryptocurrencies and stablecoins, streamlining oversight and coordination across related areas.