The Japanese government approved new requirements for foreign stablecoins and electronic payment instrument operators. The amendments are intended to formalize and tighten the existing framework governing the admission of such assets to the country’s market.
According to the Cabinet Office ordinance, updated rules for foreign electronic payment instruments, including stablecoins backed by fiat reserves, will come into force in Japan on June 1, 2026. The document establishes the criteria that issuers and intermediaries must meet in order to operate with such assets.
The amendments introduce more detailed regulation for foreign stablecoins that Japanese companies may offer to clients. The changes aren’t aimed at opening the market to all digital assets, but rather at creating a formal approval mechanism for regulated issuers.
Among the key requirements imposed by Japanese authorities on foreign stablecoins and their issuers are:
- possession of a license or registration comparable to the requirements of Japanese law;
- oversight by a foreign regulator willing to provide information to Japan’s Financial Services Agency (FSA);
- mandatory reserve backing for stablecoin redemptions;
- independent audits of reserves;
- matching the reserve currency to the currency of the stablecoin itself;
- mechanisms for suspending operations and freezing transactions in cases of suspected fraud or criminal activity.
The document also extends similar requirements to banks, trust structures, and electronic payment instrument operators working with foreign digital assets. Unified standards will apply to issuer verification, reserve monitoring, and risk assessment.
In addition, Japanese authorities clarified the legal status of certain electronic payment instruments under the Financial Instruments and Exchange Act. In particular, the regulator established a distinction between electronic payment instruments and digital assets classified as securities. Under the amendments, certain types of electronic payment instruments:
- will not automatically be treated as securities;
- will receive a separate regulatory framework as electronic payment instruments;
- may be used under payment services rules rather than securities legislation;
- will be exempt from potential dual regulation.
The ordinance will take effect on June 1, 2026. Until then, the existing legal framework will remain in force.
Japan recently tightened cryptocurrency market regulation by classifying crypto-assets as financial instruments, introducing a ban on insider trading, and increasing penalties for non-compliance with regulatory requirements. At the same time, in 2025, major local financial institutions began developing their own stablecoins. In particular, JPYC, the first yen-denominated stablecoin, was launched.
