Japan's financial authorities are reportedly considering a major move to allow local banks and banking groups to offer cryptocurrency trading services, in an effort to expand market access and increase competition in the financial sector.
According to a Nikkei report, Japan's Financial Services Agency (FSA) is also considering lifting an existing ban that prevents banks from buying and holding crypto assets as part of their investment portfolios.
Currently, subsidiaries of banking groups are not allowed to register with the regulator to offer digital asset services under Japan's Banking Act.
Sources reported that the FSA is currently examining a revision to existing regulations to allow securities subsidiaries of banking groups to offer crypto-related services, a move that is seen as expanding market access and creating a level playing field between major financial institutions.
Currently, Japan's crypto asset market is still dominated by a combination of securities companies, including Rakuten Wallet, a subsidiary of Rakuten Securities, and a unit of SBI Holdings.
However, they will remain cautious in implementing this new policy.
Due to the high volatility of crypto prices and the risk of large losses, regulators will require any securities company affiliated with a bank to provide retail investors with clear explanations about the true risks of investing in digital assets.
