Japan's Financial Services Agency has opened a new policy review of decentralised finance and tokenised financial services, putting the treatment of decentralised exchanges and wallet providers before a study group that met for the first time on October 20.
The meeting agenda and its accompanying papers set out questions for examination, not new permissions or restrictions taking effect that day. The agency asked which legal issues should receive priority as it tries to reconcile financial innovation with investor protection. The agenda also included hearings from Nomura Holdings and Securitize Japan.
For businesses serving Japanese residents, the distinction is practical. A review of possible rules for an exchange interface or wallet is not an authorisation to provide a service. The October materials describe a policy process covering stablecoins and tokenised deposits as well as securities recorded on distributed ledgers.
Exchange interfaces are part of the discussion
The agency's 53-page secretariat paper asks how the legal framework should respond to decentralised exchanges, commonly called DEXs, and other decentralised finance services. Its diagram distinguishes the exchange protocol from the app or other user interface connecting a customer to it. It also identifies unhosted wallets and services that aggregate access to multiple exchanges.
That distinction matters to the regulatory questions being examined. A system can involve several different functions rather than one business performing every task. The paper says there is no settled view of precisely which components should be included within the definition of a DEX. It therefore presents its diagram as an illustration, not a final legal boundary.
The paper reproduces recommendations from a December 10, 2025 working-group report. Those recommendations call for continued consideration of rules suited to the technology, rather than simply assuming that the existing requirements for crypto-asset exchange businesses should apply unchanged. They identify losses caused by protocol defects and misuse for money laundering as risks.
For providers of interfaces aimed at domestic residents, that earlier report envisaged studying risk explanations and anti-money-laundering measures, including identity checks. It called first for a better understanding of how these services operate, while watching developments overseas. These are earlier recommendations brought into the new review, not identity-check duties newly imposed on October 20.
Who is responsible for a shared ledger?
The review reaches beyond access to crypto exchanges. Another part of the secretariat paper examines how Japan's securities book-entry system would work with a distributed ledger. The existing structure involves designated transfer institutions and account-management institutions maintaining records at different levels. A shared ledger raises questions about who bears responsibility and how supervision should operate.
The paper also asks what account-management institutions would do if the transfer institution could directly identify each participant's holdings. Personal-information management is part of that question. A further issue is how transfer procedures on a distributed ledger would connect with the existing book-entry arrangements.
Stablecoins and tokenised deposits are separate subjects on the agenda. The paper describes the tokenisation of both the asset being traded and the means of payment, potentially allowing the transaction and settlement to take place on a blockchain. It presents faster settlement and round-the-clock activity as possible consequences of that structure, not guaranteed outcomes for every product.
For stablecoins, the paper sets out an existing framework that separates issuance from intermediary services. It lists obligations concerning redemption rights and information supplied to customers by issuers. For intermediaries, the material describes registration, safeguarding of customer assets, external audits of their management, information security and anti-money-laundering controls. This existing framework is background for the review, rather than a package first enacted at the meeting.
The final discussion questions ask members to identify the legal issues worth examining further for each of these models. They also ask what should be considered if tokenisation shortens securities-settlement periods. The document does not announce a date when a new DEX rule, wallet licence or settlement requirement will begin.
A review, not a new operating licence
The study group sits within Japan's wider on-chain finance initiative. The secretariat material describes a broader forum expected to prepare an interim assessment and a public-private roadmap in early 2027. That timetable should not be read as a promised commencement date for every issue being considered by the study group.
The questions differ from the measures covered in Dalimss News's reports on Ireland's planned crypto-notification portal and France's proposed MiCA changes. Japan's October 20 papers establish the subjects for examination; they do not settle the eventual regulatory treatment of each service.
Adapted and translated into English by Dalimss News from Japan Financial Services Agency materials, licensed under Public Data License 1.0. This is not an official translation or endorsement.
