Senate Approves Major Update to Crypto Law
In a significant shift for Japan’s crypto industry, the House of Councilors (Japanese Senate) has officially approved amendments to the Payment Services Act, introducing a more flexible regulatory path for crypto brokerage firms. Passed on June 6, the new bill creates a separate legal category known as “intermediary businesses”, offering crypto brokers an alternative to the strict licensing system currently imposed on exchanges and wallet operators.
According to Nihon Keizai Shimbun, the move is intended to deregulate key parts of the industry while maintaining oversight. Under the existing framework, brokerages must apply to the Financial Services Agency (FSA) for the same demanding licenses required by full-service crypto exchanges. The revised bill dramatically lowers the compliance threshold for firms categorized under the new intermediary bracket.
Regulatory Green Light Follows Smooth Parliamentary Approval
The FSA and the Japanese government approved the proposed amendments in March 2025 and submitted them to the National Diet shortly thereafter. The bill sailed through the lower house without major opposition and has now passed the upper house as well.
With full legislative approval, the reform bill is slated to take effect in June 2026. Lawmakers say this delay allows for the development of new compliance guidelines and operational frameworks for intermediaries, while preparing regulators to adapt to a more decentralized financial environment.
Lawmakers Promise Innovation and Customer Protection
The bill isn’t just about deregulation. Lawmakers behind the amendment say it’s a direct response to the rise of digital finance and aims to foster innovation while also strengthening consumer protections.
The bill also includes a crucial clause allowing the Prime Minister’s office to compel crypto exchanges to hold a portion of their assets domestically. This clause was directly inspired by the FTX collapse in 2022, where FTX Japan users were locked out of their funds due to reliance on overseas liquidity.
FTX Fallout Prompts New Safeguards
To prevent another FTX-style meltdown, the amendment stipulates that the exact percentage of assets required to be held in Japan will be specified by Cabinet Order. This ensures flexibility while empowering the government to act swiftly in case of market instability.
In bankruptcy scenarios, crypto companies will now be prohibited from sending funds abroad. Instead, they will be obligated to refund users through approved domestic guarantors, such as licensed trust banks. These changes are designed to ensure faster and more reliable compensation for affected users, should a platform fail.
Lower Barriers May Accelerate Web3 Expansion
Major businesses and gaming firms eyeing web3 opportunities are already celebrating the bill. Experts suggest that the intermediary license will significantly lower entry barriers for non-traditional crypto firms that want to operate in Japan without navigating the intensive compliance regime required for full exchanges.
This could trigger a wave of innovation in sectors such as blockchain gaming, NFT platforms, and decentralized apps, all while preserving financial integrity through Japan’s layered regulatory model.
