Japan’s Financial Services Agency (FSA) is establishing a dedicated Cryptocurrency and Stablecoin Division, giving digital-asset regulation its own department as the country strengthens oversight of the rapidly developing sector.
The FSA announced the organisational changes on 5 August, with the new structure due to take effect on 7 August, according to Japanese publication NADA NEWS.
The division will operate within the Asset Utilization and Insurance Supervision Bureau. It replaces an arrangement under which cryptocurrency-related responsibilities were divided between the Cryptocurrency and Blockchain Innovation Office and the Cryptocurrency Monitoring Office, both located within the Risk Analysis Division of the Comprehensive Policy Bureau.
The creation of a standalone division represents a formal elevation of cryptocurrency supervision within the regulator. Previously, the relevant responsibilities were managed by office-level units rather than an independent department.
Three specialist offices will operate under the new division. The Cryptocurrency Monitoring Office will continue to supervise cryptocurrency exchange operators. The newly organised Innovation Promotion Office and Digital Payment Planning Office will concentrate on financial innovation and policy relating to digital payments.
The FSA said the restructuring was designed to meet new regulatory demands created by the digitalisation of finance. It also aims to improve the agency’s ability to supervise financial institutions as technology continues to evolve.
The changes come only weeks after Japan approved wide-ranging amendments to the Financial Instruments and Exchange Act, reclassifying crypto assets as financial instruments.
Under the revised legislation, responsibility for cryptocurrency oversight is moving away from the framework created by the Payment Services Act, under which digital assets had largely been treated as payment instruments.
The amendments introduce insider-trading restrictions for crypto transactions. Market participants will be prohibited from trading on the basis of material non-public information.
Some cryptocurrency issuers will also face annual disclosure obligations intended to improve transparency. At the same time, penalties for operating a cryptocurrency business without registration will become substantially tougher.
Once the provisions take effect, the maximum prison sentence for running an unregistered cryptocurrency business will rise from three years to 10 years. The maximum financial penalty will increase from 3 million yen to 10 million yen.
Finance Minister Satsuki Katayama has previously said the reforms are intended to improve market fairness, transparency and investor protection, while helping expand access to growth capital as financial markets change.
The new division is part of a wider series of initiatives bringing Japan’s cryptocurrency rules closer to those governing traditional financial markets.
At a financial conference in Tokyo in July, Liberal Democratic Party lawmaker Seiji Kihara said Japan’s existing two-times leverage limit for cryptocurrency trading was too restrictive and was limiting liquidity and price discovery, according to Nikkei.
Kihara, who leads the Liberal Democratic Party’s Next Generation AI and On-Chain Finance Project Team, said easing the leverage limit was part of Japan’s continuing digital-asset reforms. No timetable for implementing such a change has been announced.
The amended financial law has also created the legal basis for a separate tax regime for cryptocurrency gains. The proposed framework includes an effective 20% tax rate and a three-year loss carry-forward deduction. Previous reports said those tax provisions are expected to come into force in 2028, once supporting regulations have been completed.
The same package of reforms has advanced preparations for cryptocurrency exchange-traded funds in Japan. Nikkei previously reported that the FSA was preparing changes to investment trust rules that could eventually permit Bitcoin ETFs once the necessary legal framework is finalised.
Overseas exchanges face continued scrutiny
The establishment of the Cryptocurrency and Stablecoin Division comes as Japanese regulators continue to enforce registration requirements against offshore cryptocurrency exchanges.
Earlier this month, Bitget said it would immediately stop accepting new users from Japan. It will introduce restrictions on existing accounts from 1 November and automatically close any remaining positions on 31 December as it leaves the Japanese market.
The decision followed several warnings issued by the FSA since 2023 over allegations that Bitget was providing cryptocurrency services in Japan without local registration.
In 2025, the Kanto Local Finance Bureau also warned BTG Technology Holdings Limited, identifying the company as operating under the Bitget name, over the unregistered online solicitation of over-the-counter derivatives.
Alongside enforcement measures, Japan continues to promote digital-asset development through separate policy programmes. Prime Minister Sanae Takaichi has previously described Web3 as part of the country’s national innovation strategy.
Lawmakers are also continuing to develop measures covering cryptocurrency taxation, investment products and market conduct as Japan’s regulatory framework evolves.
