The Japanese FSA has established a department for cryptocurrency and stablecoin assets.

The Japanese Financial Services Agency has officially established a Cryptocurrency and Stablecoin Asset Division following the announcement of organizational restructuring.

8/15/20264 min read

Organizational structure significance

The upgrade of the FSA's structure from "office" to "division" has significant institutional implications, going far beyond mere administrative designations. A "division" unit within the FSA is allocated more personnel, has a larger independent budget, and enjoys privileged access to high-level meetings not granted to "office" units in other departments. The previous structure, with the cryptocurrency oversight unit within the Risk Analysis Division of the General Policy Department, reflected the FSA's initial approach: viewing cryptocurrencies as a financial risk management issue requiring oversight, rather than as a distinct asset class requiring specialized policy-making, licensing, and innovation promotion processes.

The new "department" structure reflects the recognition that Japan's cryptocurrency regulatory ecosystem has become sufficiently complex after nine years of formal exchange licensing, thus requiring specialized organizational capacity. The Japan Association of Virtual Asset and Cryptocurrency Exchanges currently oversees over 30 licensed exchanges. The stablecoin regulatory framework under the Payment Services Act (effective June 2023) established a licensing mechanism for issuers of yen-pegged stablecoins, limited to licensed banks, money transfer service providers, and trust companies, coupled with operational compliance requirements demanding regular interaction with regulators. The joint venture between SBI Holdings and Solana Foundation (announced on July 13), Metaplanet's continuous accumulation of Bitcoin, and the wave of cryptocurrency activity by financial institutions, with Japan becoming a central hub, all created a need for oversight that exceeded the capacity of the previously two-office structure.

Three Offices and Their Distinct Missions

The department's three subsidiary offices address different aspects of Japan's cryptocurrency regulatory landscape, each with distinct functional tasks that the previous two-office structure did not clearly separate.

The Office of Crypto Asset Supervision and Administration (FSA) takes over its predecessor, the FSA, and expands its mandate with additional resources. Its core function is oversight and enforcement of licensed virtual asset service providers registered under the Payment Services Act, monitoring compliance with AML, KYC, cold wallet splitting, and other operational requirements. The FSA is also responsible for enforcing regulations against foreign platforms operating without FSA authorization – a function that has issued warnings against Bitget, Bybit, and other exchanges offering services to Japanese users without registration, leading the FSA to request Apple and Google remove their apps from Japanese app stores.

The Office for the Promotion of Innovation replaces the Office for Cryptocurrency, Blockchain and Innovation with a clear focus on supporting the development of compliant business models. Its mission reflects Japan's policy objective of attracting institutional cryptocurrency activity and technical innovation while maintaining the supervisory standards that make Japan's licensed exchange framework one of the most strictly regulated globally. The institutional development of SBI Holdings, Metaplanet Ventures, and the potential Bitcoin ETF development being considered by the FSA all fall within the purview of the Office for the Promotion of Innovation.

The trend of withdrawal by foreign exchanges.

The establishment of this new division comes amidst a tightening and increasing enforcement of laws against foreign platforms throughout 2026. Bitget announced its withdrawal from the Japanese market before the 31st of this month, after receiving three warnings from the Financial Services Agency (FSA) and facing new laws increasing prison sentences for operating unlicensed exchanges from three to ten years. Bybit had previously completed its withdrawal from the Japanese market in early 2026 due to similar pressure from the FSA. The process, involving increased warnings, requests to remove applications from app stores, and ultimately the withdrawal of foreign platforms, has proven effective in concentrating the volume of cryptocurrency trading by individual investors in Japan on licensed domestic exchanges, and a few international operators (such as Coinbase) have completed registration procedures with the FSA.

The Crypto Asset Supervision Office, now part of this new division, will take over the law enforcement functions that led to the aforementioned withdrawals, while also implementing a stricter criminal penalty framework established by legislation enacting in July 2026. The combination of specialized enforcement capabilities within a single, independent unit and criminal penalties of up to ten years creates a significantly stronger deterrent than the previous model, which relied on the same enforcement capabilities but dispersed across smaller offices within a larger regulatory body.

Assessment and Conclusion

For the cryptocurrency industry licensed in Japan and international organizations operating regulated activities there, the establishment of this new department provides a single high-level point of contact with regulators, something the previous decentralized structure could not provide. SBI Holdings' digital asset operations, the global joint venture SBI-Solana, and Metaplanet's Bitcoin holding strategy all involve legal issues with the Financial Services Agency (FSA); the new department will centralize and manage these relationships as a more clearly defined legal entity than the previous model of two offices under a single risk analysis unit.

The roadmap spans approximately eight months, from approval in December 2025 to official operation in August 2026, reflecting the FSA's cautious and systematic approach to implementation. This timeframe is sufficient for staff recruitment, establishing internal operating procedures, and coordinating the organizational transition from the old structure before the official launch. The presence of this new division provides Japan's rapidly developing cryptocurrency market with a central regulatory infrastructure commensurate with the scale of current institutional operations, including holding hundreds of billions of yen worth of Bitcoin, issuing yen-pegged stablecoins by trust banks, and plans to launch cryptocurrency ETFs for institutional investors.

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Compiled and analyzed by HCCVenture

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