Japan Scraps Stablecoin Cap, Paving Way for Institutional Growth

Japan's Financial Services Agency (FSA) has made significant changes to its regulations on stablecoins, lifting the 1 million yen ($6,700) cap on transactions for certain operators. The revised Payment Services Act of 2023 had imposed this limit on second-category funds transfer service providers, which was widely criticized for restricting stablecoin usage.

The removal of the cap is expected to allow larger stablecoin transactions, benefiting institutional users and paving the way for broader adoption in Japan's digital asset market. The FSA's decision also aligns with its goal of fostering innovation while maintaining consumer protection and financial stability.

In addition to lifting the cap, Japanese authorities plan to establish a dedicated department for cryptocurrencies and stablecoins, reflecting their growing importance in the country's financial system. This move is expected to streamline oversight and coordinate policy across related areas.