Key Takeaways
Why does Japan consider crypto as a banking investment?
Interest in digital assets has been growing, especially in Japan.
How does Japan compare to regional markets in terms of crypto adoption?
According to Chainalysis, Japan topped the 2025 adoption list with a 120% growth in crypto users.
Japan may be gearing up for a major overhaul to boost cryptocurrency adoption.
The country’s regulator, the Financial Services Agency (FSA), is considering allowing banks to hold crypto assets Bitcoin [BTC] as investments, according to a Livedoor report.
In recent years, the cryptocurrency market has grown tremendously, with the US leading the way in institutional adoption through ETFs. The crypto holdings of the world’s largest asset manager, BlackRock, recently surpassed $100 billion.
Other banks and investment firms such as JPMorgan and Morgan Stanley allow wealthy clients to have crypto exposure in the US. Standard Chartered also made a similar proposal in July. movement for its UK customers, starting with BTC and Ethereum [ETH].
At the time, the banking giant said there was “growing interest in regulated digital asset solutions.”
Japan’s regulatory shift is driving adoption
To reach and catch up with its US counterparts, Japan is looking to expand regulatory clarity to allow cryptocurrencies in banking investments.
According to Livedoor, a working group led by the Prime Minister will discuss the new guidelines to enable banks to act as crypto exchanges.
Given the volatility of cryptocurrencies, the risk mitigation system for banks will also be examined to ensure the security of the institutions.
In June, the FSA suggested a reclassification of crypto assets into ‘financial products’ to pave the way for crypto ETFs (exchange traded funds).
It is the same framework that applies to securities and other traditional financial products in Japan. Experts also emphasized that this move would reduce crypto taxes from over 50% to 20%.
Given the similar treatment to traditional equities, this also applies to the country forbidden crypto insider trading with new rules.
Collectively, the recent updates are aimed at ensuring user protection and continued adoption.
Japan leads Asian crypto growth in 2025
Basically Chainalysis report has picked Japan as the fastest growing crypto market in the broader Asia-Pacific region by 2025.
It saw a 120% growth in the crypto market thanks to regulatory shifts Ripple [XRP] as the dominant crypto asset. Indonesia, South Korea and India followed closely with growth rates of 103%, 100% and 99%.
Source: Chain analysis
By early 2025, there were approximately 12 million new crypto accounts in Japan, an increase of 3.5 times compared to five years ago.