The Japanese House of Councilors, the upper house of the nation’s parliament, has approved a landmark legal amendment aimed at fostering innovation in the cryptocurrency sector while bolstering customer safeguards. The revisions to the Payment Services Act, which passed on June 6, are set to significantly alter the regulatory landscape for crypto brokerage firms in Japan.
According to the Japanese newspaper Nihon Keizai Shimbun, a key component of the newly approved legislation introduces a new category for “intermediary businesses” within the crypto sector. This move will significantly reduce the regulatory hurdles faced by brokerage firms, which previously had to obtain the same stringent and highly restrictive operating permits as crypto exchanges and wallet operators from the Financial Services Agency (FSA). The new intermediary category will benefit from much lighter compliance requirements, aiming to encourage growth and participation in the digital finance space.
The amendments, initially approved by the FSA and the government in March and subsequently submitted to the National Diet, faced little opposition in the lower house. With its approval by the House of Councilors, the bill is now slated for promulgation in June 2026.
Lawmakers emphasize that the amendment is a proactive response to the rapid expansion of digital finance, designed to stimulate innovation across the country while simultaneously enhancing customer protection. Japanese media reports suggest that major businesses anticipate these measures will significantly lower barriers for gaming firms seeking to venture into the web3 and crypto realms.
In a direct response to the 2022 collapse of crypto exchange FTX, the bill also introduces crucial customer protection clauses. It empowers the Prime Minister’s office to mandate that individual crypto exchange operators hold a specified portion of their assets within Japan, with the exact amount to be determined by a Cabinet Order. This provision addresses the issue faced by FTX Japan users, who were unable to access overseas funds following the parent company’s bankruptcy.
Furthermore, the new rules will prohibit overseas operators or subsidiaries from transferring funds abroad if they face bankruptcy. Instead, the government will gain the authority to compel crypto operators to issue customer refunds through approved guarantor companies, such as trust banks, in the event of insolvency.