Japan’s regulator seeks public input on bonds eligible for stablecoin reserves

Japan's Financial Services Agency (FSA) has initiated a public consultation on draft regulatory notices concerning reserve assets for stablecoins issued via trust structures, as part of the 2025 amendments to the Payment Services Act. The proposed standards severely restrict eligible collateral to certain foreign-issued bonds that must meet two strict criteria: a high credit rating (category "1–2" or above) and the foreign issuer must have at least 100 trillion yen (about $648 billion) in total outstanding bonds. Additionally, the FSA released supervisory guidelines requiring subsidiaries engaging in crypto intermediation to provide clear risk explanations to customers. The consultation, which runs until February 27, 2026, also mandates that applicants handling foreign-issued stablecoins must confirm the issuer will not target Japanese users for issuance or redemption, while the FSA plans to coordinate information sharing with overseas regulators. This action supports Japan's efforts to build a regulated stablecoin ecosystem, following recent developments like JPYC's yen-backed stablecoin launch and pilot projects by major banks.

(Source：The Block)