Japan weighs allowing banks to hold Bitcoin

Japan’s banking sector may be on the verge of a landmark regulatory change as the FSA considers allowing commercial banks to hold digital assets such as Bitcoin.

Under current guidelines issued in 2020, banks in Japan are effectively barred from acquiring crypto‑assets as investments due to concerns over volatility and risk. 

According to an article in The Japan Times dated 21 October 2025, an unnamed FSA official confirmed the regulator is exploring a revision that would permit banks to invest in crypto‑assets if they can demonstrate effective risk‑management frameworks.

Separately, other reports suggest the reform could include authorising banking groups to operate as licensed crypto exchange operators. 

The timing of this review comes amid a broader push in Japan to modernise financial services and adapt to the digital‑asset era. For example, Japan has already seen significant growth in cryptocurrency adoption, with more than 12 million crypto accounts registered by February 2025. 

If implemented, the reform would treat crypto‑assets more like stocks or government bonds, enabling banks to hold them as part of investment portfolios rather than excluding them entirely. 

Nevertheless, the FSA emphasises caution. Any change would likely be contingent on establishing thresholds for risk exposure, robust capital safeguards and disclosure requirements. The regulator has indicated that allowing banks to sellcrypto‑assets to clients remains unlikely at this stage. 

For the Bitcoin market, such a regulatory shift in Japan could be significant. It would signal further institutional acceptance of Bitcoin as part of mainstream financial holdings and could pave the way for increased demand from traditional banking entities. As these developments unfold, stakeholders will be watching for the FSA’s forthcoming working‑group meeting of the Financial System Council, an advisory body to Japan’s prime minister, which may set the next stage for reforms.