Catenaa, Friday, November 14, 2025- Japan’s Financial Services Agency is weighing new rules requiring digital asset custodians and trading service providers to register with authorities before offering services to crypto exchanges. The measure aims to tighten oversight and reduce risks of theft or system failures.
A working group under the Financial System Council, an advisory body to the Prime Minister, discussed the proposal on November 7. Current regulations require exchanges to secure user deposits, often in cold wallets, but no similar rules exist for third-party custodians. Under the plan, only registered custodians could provide services to exchanges.
The proposed change follows high-profile incidents such as the 2024 DMM Bitcoin hack, where roughly 48.2 billion yen ($312 million) in bitcoin was stolen through a Tokyo-based software provider, Ginco, contracted by the exchange for trading management.
Lawmakers and regulators cited this as an example of gaps in the current framework.
Most working group members reportedly supported the new system, emphasizing the need for clearer digital asset regulations.
The FSA plans to compile a report from the discussions and submit amendments to the Financial Instruments and Exchange Act during Japan’s 2026 ordinary Diet session.
Separately, the FSA continues to encourage local stablecoin projects. Last month, Japan approved its first yen-pegged stablecoin, JPYC. The agency also announced support for a pilot stablecoin initiative involving Mizuho Bank, MUFG, and SMBC.
The proposed registration requirement would formalize oversight of third-party crypto custodians and trading services, aiming to prevent future breaches and strengthen investor protections.
