Yomiuri: Japan to Discuss Allowing Banks to Acquire Cryptocurrencies for Investment Purposes
By Miyu Okada / Yomiuri Shimbun Staff WriterThe Financial Services Agency is set to begin discussions on reforming systems to allow banks to acquire and hold cryptocurrencies such as bitcoin for investment purposes, according to sources.The agency aims to establish a framework that enables banks to buy and sell cryptocurrencies just like stocks and government bonds, as cryptocurrency trading continues to expand both inside and outside Japan.It also plans to set regulations to ensure that banks maintain their financial soundness.The theme will be discussed by a meeting of a working group of the Financial System Council — an advisory body to the prime minister — scheduled soon.Prices of bitcoin and other cryptocurrencies are prone to larger fluctuations than stocks and government bonds as they lack underlying assets. If banks hold large amounts of cryptocurrencies, their financial stability may suffer when prices drop sharply. This is one of the reasons the Financial Services Agency's supervisory guidelines, which was last revised in 2020, effectively prohibits banking groups from acquiring cryptocurrencies for investment purposes.â¯The working group is expected to discuss establishing a system that manages the risks of cryptocurrencies.Additionally, the agency is considering allowing banking groups to register as providers of cryptocurrency exchanges — entities that are allowed to provide such services as the selling, buying and exchanging of digital assets. The agency aims to create an environment where individual investors can more easily engage in investment by enabling banking groups with high credibility to provide opportunities.Cryptocurrency trading is expanding in Japan. According to sources including the Financial Services Agency, the number of cryptocurrency accounts opened in Japan was over 12 million as of the end of February, about 3.5 times the level five years prior.----This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.YDN-M0000152067-1