Japan’s Financial Services Agency has drafted new rules on eligible bonds for stablecoin reserves, with public feedback open until February 27, 2026, to implement amended Payment Services Act directives.
The initiative emphasizes high-quality bond use like Japanese, US government debt, impacting yen-pegged stablecoins, possibly increasing demand in Japan’s extensive bond market.
Japan’s Financial Services Agency is drafting rules on eligible bonds for stablecoin reserves. The draft rules, aimed at yen-pegged tokens, suggest high-quality bonds, allowing up to 50% in low-risk assets if the principal is preserved.
Japan’s Financial Services Agency leads the policy change, emphasizing high-quality bonds like short-term Japanese and US government debt. Noritaka Okabe made a statement through Reuters, introducing new regulations impacting stablecoin reserves.
We plan to allocate 80% of our proceeds in Japanese Government Bonds and 20% in bank deposits.
Increased JGB Demand Expected from New Rules
The regulations are expected to drive demand for Japanese Government Bonds (JGBs), as banks adjust reserves. Major banks such as MUFG, SMBC, and Mizuho are part of this shift, impacting market dynamics.
The focus lies on yen-pegged stablecoins, primarily affecting JPYC with reserve shifts towards JGBs. Past policies showed limited effects on wider altcoin markets; current rules predominantly target yen-pegged tokens and foreign stablecoin handling.
Japan Aligns Stablecoin Policies with Global Standards
The 2025 revisions to Japan’s Payment Services Act echo similar mixed reserve policies previously seen in the US and EU. The initial restrictions on stablecoin reserves are evolving, though decentralized finance protocols remain uninfluenced.
Experts from Kanalcoin suggest that the emphasis on JGBs may boost their demand, particularly as the Bank of Japan reduces its procurement. This strategic move aligns Japan with global standards, fostering a more adaptable financial environment.
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