JAPAN Trends and Developments Contributed by: Keiji Tonomura, Shu Sasaki, Kazuyuki Ohno and Otoki Shimizu, Nagashima Ohno & Tsunematsu
Proposed Amendments to Stablecoin Legislation in Japan Overview On 1 June 2023, amendments to the Payment Services Act (PSA) came into effect, introducing a legal framework for the issuance and distribu - tion of so-called stablecoins in Japan. Under the PSA, stablecoins are defined as “electronic pay- ment instruments” . Despite this development, more than a year and a half after the amended PSA came into effect, there do not appear to be any examples of commercialised payment services using electronic payment instruments by Japanese companies in Japan. In September 2024, the Financial Services Agency (JFSA) con - vened an experts’ panel, the Financial System Council’s “Working Group on Payment Services System, etc” , to consider further amendments to the current stablecoin legislative regime, and this working group issued the report on 22 January 2025 (the “2025 Report” ). Based on the 2025 Report, the government submitted the relevant bill to the National Diet in March 2025. The following is an overview of the direction of these amendments, with a particular focus on the issuance of stablecoins. It should be not - ed that the explanation below is based on the results of discussions of the JFSA’s experts’ panel and the bill submitted by the government, and may differ from the final statutory provisions of the legislation to be determined based on future deliberations by the relevant government
notification to the JFSA. The following is envi - sioned as the flow of payment services using Trust Beneficiary Interest Stablecoins. • Issuance – an intermediary selling the Trust Beneficiary Interest Stablecoins to users will, as the trustor, entrust funds to the issuer and thereby acquire Trust Beneficiary Interest Stablecoins. • Custody of funds – the issuer, acting as the trustee of the Trust Beneficiary Interest Stablecoins, must hold all entrusted funds in deposit form. • User remittance – users wishing to remit funds pay the amount they wish to remit to the intermediary and receive Trust Beneficiary Interest Stablecoins in the equivalent amount. • Transfer – the remitter transfers the received Trust Beneficiary Interest Stablecoins to the recipient. • Redemption – recipients of Trust Beneficiary Interest Stablecoins can redeem them at face value upon request to the issuer. Based on the custody of funds under the sec - ond bullet point above, under current law, issu - ers of Trust Beneficiary Interest Stablecoins are required to manage the entire amount of the funds accepted for the issuance in deposit form under a savings account. Additionally, when issuing yen-denominated Trust Beneficiary Interest Stablecoins, the entire amount of funds accepted from users must be maintained in yen- denominated demand deposits, among other requirements. When issuing Trust Beneficiary Interest Stablecoins denominated in a foreign currency, all funds accepted from users must be maintained in foreign currency-denominated demand deposits, among other requirements. From a regulatory perspective, Trust Benefi - ciary Interest Stablecoins are excluded from
authorities, the National Diet, etc. Revision of Trust Beneficiary Interest Stablecoins
Under the PSA, one category of electronic pay - ment instruments is “Trust Beneficiary Interest Stablecoin” . Trust banks and trust companies may issue and redeem Trust Beneficiary Interest Stablecoins by submitting the necessary prior
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