According to Odaily, Japan's Financial Services Agency (FSA) is considering a new system requiring third-party institutions providing asset custody or transaction management services to cryptocurrency exchanges to register with the regulatory body before providing such services. The proposal was discussed on November 7th at a working group meeting of the Financial System Deliberation Council, an advisory body to the Prime Minister.

Current regulations only require cryptocurrency exchanges to strictly manage user assets, such as using cold wallets for storage, but do not impose corresponding requirements on related outsourcing service providers. The FSA plans to regulate such institutions through a registration system and require exchanges to use only registered custody or management systems to prevent theft of funds or system failures due to security vulnerabilities.

The report points out that the intrusion point in the 2024 DMM Bitcoin theft (a loss of approximately 48.2 billion yen, equivalent to $312 million) originated from Ginco, an outsourced trading system provider. Most members of the working group support the new regulation, believing it will help improve the transparency of cryptocurrency regulation.

The Financial Services Agency (FSA) expects to finalize its policy report as soon as possible and plans to submit amendments to the Financial Instruments and Exchange Act at the regular Diet session in 2026. Furthermore, the agency is actively promoting local stablecoin projects, recently approving the first yen-pegged stablecoin, JPYC, and supporting stablecoin pilot programs involving Mizuho Bank, Bank of Mitsubishi UFJ, and Sumitomo Mitsui Banking Corporation. (The Block)