Japanese FSA Elaborates on Cryptocurrency Transition Framework to the FIEA, Simultaneously Advances Three Stablecoin Settlement Pilot Projects

At the 9th BCCC Collaborative Day on April 21st, Shigetomo Shimizu—Director of the Risk Analysis Division at Japan’s Financial Services Agency (FSA) Integrated Policy Bureau—disclosed that a bill has been submitted to the special Diet. The legislation would shift regulation of cryptocurrencies from the Fund Settlement Act to the Financial Instruments and Exchange Act (FIEA). The move aims to boost user protection, with key measures including: issuer information disclosure requirements; a new category for “cryptocurrency exchange businesses”; stiffer penalties for unlicensed operators; enhanced enforcement; and rules targeting insider trading plus a dedicated penalty system. Separately, three proof-of-concept (PoC) experiments are underway as part of the FSA’s Payment Interface Project (PIP)—launched in November last year. They include: 1. A joint yen stablecoin issuance by three major banks, testing cross-border settlement efficiency for large trading firms; 2. On-chain securities settlement: Using a transfer system aligned with existing laws, this experiment records transfers of rights (e.g., government bonds, stocks) on blockchain. It enables synchronized cash and securities settlement via stablecoin payments, with the goal of 24/7 continuous trading and settlement; 3. Tokenized interbank deposits: Establishing a mechanism for transferring tokenized deposits between different banks, linked to the Bank of Japan’s (BOJ) central bank digital currency (CBDC) experiment.