Japan’s Financial Services Agency (FSA) has started a public consultation on which bonds can back regulated stablecoin reserves. The call for comments runs until February 27, 2026, giving banks, fintech firms, and citizens time to respond.
The consultation supports the 2025 changes to Japan’s Payment Services Act, which updated rules for electronic payment instruments and stablecoins. Regulators want clearer standards for the “specific trust beneficiary rights” that hold assets backing yen‑pegged stablecoins.
The draft rules, revealed January 27, focus on bonds that stablecoin issuers can hold inside these trust structures. Officials aim to define which securities qualify as sufficiently safe and liquid to protect users’ funds.
Early guidance suggests a preference for high‑quality bonds, such as short‑term Japanese and US government debt. Under related policy material, up to 50% of reserves may be held in low-risk assets, such as government bonds or redeemable term deposits, provided the principal is preserved.
Why Japan is Adjusting Stablecoin Reserves
Japan’s first stablecoin rules mostly required full reserves in bank deposits, which some critics saw as too strict compared with other regions. The new framework follows moves in the US, EU, and UK that allow reserves to be held in a mix of cash and top-tier sovereign debt.
The FSA intends to strike a balance between improved reserve management and safety by expanding the range of eligible bonds. Regulators continue to demand strict control of issuers and intermediaries, one-to-one backing, and the segregation of consumer assets.
Clear bond standards may help Japanese banks and trust companies design more efficient yen‑pegged stablecoins. Issuers could earn modest returns on ultra‑safe bonds while keeping enough liquidity for redemptions.
Market observers say yen stablecoins may also support demand for Japanese government bonds, though only to a limited extent. For now, the FSA’s consultation will decide how far issuers can rely on bond reserves while keeping user protection at the center of policy.
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