Japan Loosens Stablecoin Restrictions as Institutional Ambitions Grow

Japan's Financial Services Agency (FSA) has lifted restrictions on stablecoin transactions exceeding ¥1 million (approximately $6,700), paving the way for institutional adoption. The amended Payment Services Act of 2023 classified stablecoins as Electronic Payment Instruments, subjecting their issuance to strict licensing requirements.

The FSA plans to establish a dedicated Crypto Assets and Stablecoins Division, set to begin operations on August 7, 2026. This move is expected to accelerate the development of Japan's stablecoin ecosystem, with the launch of JPYC, its first regulated yen-pegged stablecoin, scheduled for 2025.

Japan is also working towards establishing equivalence frameworks for foreign-issued stablecoins, which would enable tokens minted outside Japan to operate within its regulatory perimeter. The framework is slated to take effect in June 2026, opening a potential market for global stablecoin issuers like Circle and Tether.