Japan Moves to Ease Crypto Brokerage Rules and Strengthen Customer Protection with New Payment Services Act Amendments
Japan’s Senate has approved major amendments to the Payment Services Act, signaling a progressive shift in the country’s crypto regulation. The updated law creates a legal framework for ’crypto intermediary businesses,’ lowering regulatory barriers for brokerage firms aiming to enter Japan’s crypto market. These changes loosen strict requirements currently placed on crypto exchanges and wallet operators, encouraging broader market participation and innovation, particularly from gaming and web3 companies. Set to take effect by June 2026, the amendments also enhance customer protection: the government now has authority to require crypto exchanges to hold a portion of user assets within Japan, aiming to prevent emergencies similar to the FTX collapse in 2022, where user funds became inaccessible overseas. In cases of bankruptcy, new provisions enable the government to enforce customer refunds through trust banks, blocking the offshore transfer of user funds. This reform demonstrates Japan’s commitment to fostering a dynamic, innovative, and safer crypto market, providing traders with a more stable and protected environment.
Bullish
The new Japanese regulatory framework lowers entry barriers for crypto intermediaries and brokerages, inviting fresh capital and innovative firms into the market, including gaming and web3 sector participants. By also mandating stronger customer protection measures like domestic asset custody and streamlined refund processes in bankruptcy, the reforms directly address major risks exposed by events such as the FTX collapse. This approach is likely to increase institutional and retail confidence in the Japanese crypto sector, potentially boosting trading volumes and industry growth in both the short and long term. The clear regulatory path and improved safety are positive signals for crypto traders and can make Japan a more attractive market for global crypto businesses.