Emre Yumlu 
Japan has taken a significant leap in the regulation of its digital asset ecosystem. The upper chamber of the country’s National Diet recently approved a revised version of the Payment Services Act (PSA), introducing substantial changes that are set to reshape how businesses interact with crypto assets in Japan. While the new rules are welcomed by fintech and gaming sectors, they also come with tighter controls and a noticeable tilt toward greater centralization.
New Role Defined for Crypto Intermediaries
A key feature of the amendment is the formal recognition of “intermediary businesses”—companies that connect crypto exchanges with users. These businesses will no longer be required to register as full exchanges. Instead, a new, more relaxed registration system will be introduced, opening the door for new market entrants, particularly from the gaming and financial tech industries.
Stablecoin Backing Rules Reshaped
Another major shift comes in the area of stablecoin regulation. Issuers of so-called “trust-type” stablecoins will now be allowed to back these assets with up to 50% in low-risk financial instruments, such as government bonds, rather than being fully backed by fiat. This makes it easier for banks and traditional institutions to launch their own digital currencies within a controlled legal framework.
Shielding Domestic Users from Foreign Risks
To protect Japanese users, the revised law empowers regulators to enforce asset retention requirements on overseas crypto firms. These companies may now be compelled to hold a portion of their assets within Japan to safeguard local funds in the event of financial trouble or bankruptcy. This move is aimed at strengthening consumer protection and ensuring local accountability.
Cross-Border E-Commerce Under Scrutiny
The new law also brings cross-border e-commerce platforms into focus. Firms accepting crypto or facilitating digital asset transactions from abroad could be subject to registration requirements. Regulators are especially targeting online gambling operations and fraudulent platforms, while noting that low-risk businesses might be exempt—for now. Nonetheless, the legal uncertainty may hinder smaller players looking to operate in the Japanese market.
A Shift Away from Decentralization?
Although the amendments offer a clear regulatory path for institutional actors, advocates of decentralized finance may find them concerning. By enabling banks to issue stablecoins more easily and tightening controls on permissionless, global platforms, the new rules appear to move further away from Satoshi Nakamoto’s vision of a state-independent monetary system.
Crypto Still Holds Its Ground
Despite these developments, the law does not outlaw the use of genuine decentralized cryptocurrencies. In a climate marked by economic challenges—such as a weakening yen and agricultural strain—true crypto assets continue to provide a viable alternative for financial freedom. For many in Japan, peer-to-peer, censorship-resistant currencies may still be the most promising path forward.
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