Japan Weighs Allowing Banks to Enter Crypto Trading, Increasing Access and Competition

Japan’s Financial Services Agency (FSA) is reportedly considering a major rule change that would allow traditional banks and related financial institutions to launch their own cryptocurrency trading, custody, and lending services.

Key Takeaways

• Rule Change: Currently, banks are prohibited from directly operating crypto exchanges. The potential change would grant them much wider entry into the crypto sector.
• Impact on Access: If approved, this move is expected to significantly widen access to cryptocurrencies for millions of Japanese citizens who have been relatively slow to adopt digital assets, partly due to the country’s cautious regulatory stance following the 2018 Coincheck hack.
• Increased Competition: Existing large Japanese crypto exchanges like bitFlyer and Coincheck are preparing for the rule change. However, the entry of banks would sharply increase competition, as traditional institutions offer deep liquidity, established customer bases, and reputational trust.
• Market Opportunity: Industry leaders believe there is considerable opportunity, noting that there are roughly three times as many securities account holders as crypto account holders in Japan.
• Custody Question: While bank-offered services promise better protection and compliance, the article highlights a crucial point: when crypto is held by a bank or an exchange, the user does not hold the private keys, meaning the platform retains ultimate control.
• The Case for Self-Custody: For long-term security and financial freedom, the article stresses that the rise of regulated exchanges should complement, not replace, self-custody. Holding assets in a personal, secure wallet ensures the user maintains full control over their private keys and their holdings, regardless of regulatory shifts or platform risks.

The potential rule change signals that crypto is becoming a mainstream financial service in Japan, demanding a balance between convenient, regulated access and the necessity of individual self-custody for true ownership.

November 2025, Cryptoniteuae