Bitcoin News Update: Japan to Integrate Cryptocurrency with Conventional Finance in 2026 Reserve Requirement

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Bitcoin News Update: Japan to Integrate Cryptocurrency with Conventional Finance in 2026 Reserve Requirement

Bitget-RWA2025/11/25 06:46

By:Bitget-RWA

- Japan's FSA will mandate crypto exchanges to hold reserves covering customer losses from hacks or breaches via 2026 legislation. - Reserve amounts will depend on trading volumes and historical risks, with insurance allowed to offset obligations. - The move aligns with global crypto regulations like EU's MiCA and aims to treat digital assets as formal financial products. - While enhancing investor protection for Japan's 12M crypto accounts, critics warn smaller exchanges may struggle with compliance costs

Japan’s Financial Services Agency (FSA) plans to implement compulsory reserve requirements for cryptocurrency exchanges, aiming to strengthen investor safeguards as security risks and operational challenges mount within the industry. The proposed regulations, which are anticipated to be included in a bill during the 2026 legislative session, would obligate exchanges to maintain liability reserves to compensate customers for losses resulting from hacks, unauthorized intrusions, or similar events

according to reports

. This initiative comes after a string of major incidents, such as the 2024 DMM

Bitcoin

breach that resulted in the theft of more than 4,500 Bitcoin, and the 2025 Bybit incident, which led to $1.46 billion in damages

based on data

The FSA’s plan is modeled after the reserve requirements imposed on conventional securities companies, which are required to hold between 2 billion and 40 billion yen to address losses from mishandled transactions or improper conduct

as research shows

. For crypto platforms, the size of the reserves will be determined by trading activity and past incident records, with authorities permitting some obligations to be covered by insurance

according to industry analysis

. The intention is to enable swift reimbursement for impacted customers, an issue highlighted by DMM Bitcoin’s dependence on emergency loans and asset liquidations to address losses after its 2024 hack

as the report indicates

The FSA’s strategy is in step with international developments, such as the European Union’s MiCA regulations and Hong Kong’s requirements for exchanges to maintain compensation funds for losses

according to financial analysis

. In Japan, this policy shift is part of a broader movement to recognize cryptocurrencies as financial assets rather than just payment instruments, which may also involve tax reforms and tighter rules on insider trading

as market reports suggest

. The Financial System Council, which advises the FSA, is expected to issue a report outlining these changes, including stricter separation of client funds and more efficient insolvency procedures

according to industry sources

Bitcoin News Update: Japan to Integrate Cryptocurrency with Conventional Finance in 2026 Reserve Requirement image 0

Market observers point out that although these requirements will raise compliance expenses for exchanges, they could also help reinforce investor trust in Japan’s crypto sector, which currently has around 12 million user accounts

as industry reports indicate

. Nonetheless, some critics caution that smaller exchanges may find it difficult to meet the new standards, which could lead to industry consolidation. The FSA has reiterated its goal to strike a balance between fostering innovation and managing risks, a position reflected in recent regulatory changes that permit banks to hold digital assets and experiment with yen-backed stablecoins

as financial analysts note

As global authorities step up their scrutiny following a series of notable breaches, Japan’s reserve requirement highlights the increasing convergence of cryptocurrency oversight with traditional financial protections. The FSA’s legislative efforts in 2026 are expected to play a significant role in shaping investor security in one of the world’s most advanced digital asset markets.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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