Japan has established a dedicated Cryptocurrency and Stablecoin Division within its Financial Services Agency, elevating digital asset oversight to an independent department as the country continues expanding its crypto regulatory framework.
Japanese publication NADA NEWS reported that the Financial Services Agency announced on Aug. 5 that it will create a new Cryptocurrency and Stablecoin Division, with the organizational restructuring taking effect on Aug. 7.
The new department will operate under the Asset Utilization and Insurance Supervision Bureau, replacing the previous structure in which cryptocurrency-related work was handled through the Cryptocurrency and Blockchain Innovation Office and the Cryptocurrency Monitoring Office under the Comprehensive Policy Bureaus Risk Analysis Division.
By establishing a standalone division instead of relying on office-level units, the regulator has formally elevated cryptocurrency supervision within its organizational structure.
Under the new division, the FSA will oversee three specialized offices. The Cryptocurrency Monitoring Office will continue supervising cryptocurrency exchange operators, while the newly organized Innovation Promotion Office and Digital Payment Planning Office will focus on financial innovation and digital payment policy.
The agency said the restructuring is intended to address new regulatory demands arising from financial digitalization while strengthening its ability to supervise financial institutions as technology continues evolving.
The restructuring follows Japans financial law overhaul
The organizational changes come only weeks after Japan approved sweeping amendments to the Financial Instruments and Exchange Act that reclassified crypto assets as financial instruments.
As previously reported by crypto.news, the legislation moved cryptocurrency oversight away from the framework established under the Payment Services Act, where digital assets had primarily been treated as payment instruments.
The amended law also introduced insider trading restrictions for crypto transactions, requiring market participants to refrain from trading based on material non-public information.
At the same time, certain crypto issuers became subject to annual disclosure requirements designed to improve transparency, while penalties for businesses operating without registration were significantly increased.
According to the legislation, the maximum prison sentence for operating an unregistered cryptocurrency business will increase from three years to 10 years, while the maximum financial penalty will rise from 3 million yen to 10 million yen once the provisions take effect.
Finance Minister Satsuki Katayama previously said the reforms are intended to strengthen market fairness, transparency and investor protection while expanding access to growth capital as financial markets continue changing.
Cryptocurrency regulation has continued expanding
The creation of the new division also follows several other policy initiatives that have moved cryptocurrency regulation closer to Japans traditional financial markets.
During a financial conference in Tokyo in July, Liberal Democratic Party lawmaker Seiji Kihara said Japans current two-times leverage cap on cryptocurrency trading is too restrictive and limits market liquidity and price discovery, according to Nikkei.
Kihara, who heads the Liberal Democratic Party‘s Next Generation AI and On-Chain Finance Project Team, said relaxing the leverage limit forms part of the country’s ongoing digital asset reforms, although no implementation timetable has been announced.
Separately, the amended financial law established the legal basis for introducing a separate tax framework for cryptocurrency gains, including an effective 20% tax rate and a three-year loss carry-forward deduction. Previous reporting indicated those tax provisions are expected to take effect in 2028 after supporting regulations are completed.
The same reform package has also advanced preparations for domestic cryptocurrency exchange-traded funds. Earlier reporting by Nikkei said the Financial Services Agency is preparing revisions to investment trust rules that could allow Bitcoin ETFs once the legal framework is finalized.
Stablecoin oversight arrives as enforcement increases
The creation of a dedicated Cryptocurrency and Stablecoin Division also comes as Japanese regulators continue enforcing registration requirements against offshore cryptocurrency exchanges.
Earlier this month, Bitget announced it would stop accepting new users from Japan immediately before introducing account restrictions from Nov. 1 and automatically closing any remaining positions on Dec. 31 as it exits the market.
The exchange‘s withdrawal followed multiple warnings issued by Japan’s Financial Services Agency beginning in 2023 over allegedly providing cryptocurrency services without local registration. In 2025, the Kanto Local Finance Bureau also warned BTG Technology Holdings Limited, identifying it as operating under the Bitget name, over unregistered online over-the-counter derivatives solicitation.
Alongside enforcement activity, Japan has continued promoting digital asset development through separate policy initiatives. Prime Minister Sanae Takaichi previously described Web3 as part of the country‘s national innovation strategy, while lawmakers have continued advancing measures covering taxation, investment products and market conduct under the country’s evolving cryptocurrency regulatory framework.