{"id":129482,"date":"2026-03-10T14:08:42","date_gmt":"2026-03-10T14:08:42","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=129482"},"modified":"2026-03-10T14:08:42","modified_gmt":"2026-03-10T14:08:42","slug":"japan-banking-finance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/japan-banking-finance\/","title":{"rendered":"Japan: Banking &amp; Finance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-129482","comparative_guide","type-comparative_guide","status-publish","hentry","guides-banking-finance","jurisdictions-japan"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">CHUO SOGO LPC<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/03\/clo_logo-v-En01.png\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">CHUO SOGO LPC<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/03\/clo_logo-v-En01.png\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Banking &amp; Finance laws and regulations applicable in Japan<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the national authorities for banking regulation, supervision and resolution in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Japan, the primary authorities responsible for banking regulation, supervision, and resolution is the Financial Services Agency (the \u201cFSA\u201d). The FSA is responsible for ensuring the stability of Japan\u2019s finan-cial system, giving protection to depositors, policyholders and investors, and maintaining smooth finance through planning and policymaking, inspection and supervision of financial institutions, and monitoring of securities transactions. The Commissioner of the FSA delegates a part of the authority for inspection and supervision of financial institutions to the Directors-General of Local Finance Bureaus (local branches of the Ministry of Finance).<\/p>\n<p>The Bank of Japan (the \u201cBOJ\u201d) conducts examinations on banks\u2019 operations and assets (called \u201cNichigin Kousa\u201d). Based on the findings of these examinations, the BOJ, when necessary, encourages banks to improve their risk management systems. This is based on the agreements entered into between the BOJ and banks to ensure the appropriate operation of banks\u2019 activities aimed at maintaining the stability of the financial system.<\/p>\n<p>The Deposit Insurance Corporation of Japan (the \u201cDICJ\u201d) handles bank resolution and deposit insurance, ensuring the stability of the financial system and depositor\u2019s protection. The DICJ also conducts several types of inspections, such as inspections pursuant to the Deposit Insurance Act (the \u201cDIA\u201d), which exam-ine payments of insurance premiums, and inspections pursuant to the Criminal Accounts Damage Re-covery Act, which examine procedures for damage recovery for victims of the financial fraud.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which type of activities trigger the requirement of a banking license?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Article 4(1) and Article 2(2) of the Banking Act, a banking license is required for activities such as accepting deposits and lending funds, and conducting fund transfer transactions. Entities without a banking license are generally prohibited from conducting the above activities, except for specific cases such as Fund Transfer Businesses registered under the Payment Services Act (the \u201cPSA\u201d).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your regulatory regime know different licenses for different banking services?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan operates a single licensing system for banking, meaning that both traditional banks with physical branches with staffs and digital banks without having physical branches are regulated under the same license. However, digital banks may be subject to different licensing grant conditions and supervisory frameworks.<\/p>\n<p>Apart from banks, various financial services require different licenses:<\/p>\n<ul>\n<li>Other deposit-taking institutions, such as Shinkin banks (Shinyo Kinko) and credit cooperatives (Shinyo Kumiai), are regulated under different frameworks that focus on community-based finan-cial services.<\/li>\n<li>Fund Transfer Businesses operated under the PSA may offer remittance services with certain limitations.<\/li>\n<li>Businesses engaged in money lending are required to obtain registration as a money lender un-der the Money Lending Business Act.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a banking license automatically permit certain other activities, e.g., broker dealer activities, payment services, issuance of e-money?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In addition to their core business operations, banks may engage in other businesses within the scope prescribed by the Banking Act. However, this does not automatically permit them to conduct such busi-nesses, and, if other laws or regulations require separate licenses, banks are required to obtain such licenses individually.<\/p>\n<p>Due to the policy for the separation of banking and securities businesses (Ginshou Bunri), banks are, in principle, not permitted to engage in broker-dealer activities, except where permitted under the Banking Act. However, they may conduct certain securities-related businesses if they obtain registration under the Financial Instruments and Exchange Act (the \u201cFIEA\u201d).<\/p>\n<p>Since fund transfer business, including issuance of certain e-money, and lending business are core bank-ing operations, no separate license is required for banks to conduct these activities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a \"sandbox\" or \"license light\" for specific activities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan has a regulatory sandbox system, but does not have a \u201clight banking license\u201d system. However, the Fund Transfer Business license under the PSA provides a lighter regulatory framework for money remittance services without requiring a full banking license. Especially, a Type 1 Funds Transfer Service Provider may conduct fund transfers without any limit on the transfer amount.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory restrictions or authorisation requirements apply to banks engaging in the issuance, custody or provision of services relating to cryptoassets or other digital assets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the PSA, \u201cCrypto Assets\u201d and electronically transferable monetary assets, such as stablecoins on permissionless blockchain (referred to as \u201cElectronic Payment Instruments\u201d), are defined separately. The issuance and redemption of Electronic Payment Instruments are generally classified as fund transfer transactions, which banks are permitted to conduct. However, when engaging in fund transfer transac-tions involving the issuance of Electronic Payment Instruments to customers, banks must take necessary measures to ensure that they do not issue Electronic Payment Instruments that could potentially hinder customer protection or the proper and secure execution of their operations, considering the characteris-tics of such instruments and the bank\u2019s operational framework. With this requirement, it is currently un-derstood that, except when conducted as a trust business, the issuance of Electronic Payment Instru-ments by banks is considered practically difficult.<\/p>\n<p>Banks are not permitted to custody Crypto Assets for the customers under the scope of business regula-tions set forth in the Banking Act.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can cryptoassets or digital assets constitute \"deposits\" or equivalent protected funds under applicable law, and are they capable of benefiting from depositor protection, client asset safeguarding or segregation regimes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Japan, cryptoassets and digital assets do not constitute \u201cdeposits\u201d and are not treated as equivalent protected funds. Accordingly, they are not eligible for depositor protection under the deposit insurance framework. The DICJ protects only traditional bank deposits held with licensed banks and does not ex-tend coverage to cryptoassets or digital assets. While certain client asset safeguarding or segregation requirements may apply to cryptoasset service providers under separate regulatory regimes, these are distinct from deposit protection and do not provide deposit insurance\u2013type coverage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If cryptoassets are held by the licensed entity, what are the related capital requirements (risk weights, etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For the time being, the temporary answer for regulating the soundness of holding of cryptoassets pub-lished by the FSA in October 2022 shows the related capital requirements for cryptoassets. Because cryptoassets are regarded similar to intangible fixed assets, they are excluded from the numerator of the equity capital ratio calculations as adjuster items related to Common Equity Tier1 Capital (CET1) or core capital.<\/p>\n<p>However, the FSA is currently working on details for the adoption of the content of &#8220;The Prudential Treatment of Banks\u2019 Exposure to Crypto Assets&#8221; (\u201cBCBS Report\u201d) published by the Basel Committee on Banking Supervision (\u201cBCBS\u201d) in December 2022.<\/p>\n<p>The BCBS defines two groups of cryptoassets in terms of regulatory requirements for the equity capital ratio of banks as follows:<\/p>\n<ul>\n<li>\u201cGroup 1\u201d comprising cryptoassets with low risks of price fluctuations (e.g., tokenised financial assets, and stable coins); and<\/li>\n<li>\u201cGroup 2\u201d comprising cryptoassets that do not belong to Group 1.<\/li>\n<\/ul>\n<p>While Group 1 is treated in accordance with the existing frameworks under the Basel Accords (the \u201cBasel Frameworks\u201d), Group 2 is subject to a risk weight of 1,250% in the calculation of capital requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the general application process for bank licenses and what is the average timing?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The application process for a banking license involves submitting a detailed business plan and financial projections to the FSA, which conducts a thorough review. Applicants must meet stringent capital ade-quacy, governance, and risk management requirements. The standard processing period is set at one month; however, this timeframe applies only after the formal application has been submitted to the gov-ernment. In practice, a detailed review is typically conducted during prior consultations, and when includ-ing this preliminary process, the entire procedure can take a year or more.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent may foreign or overseas banks conduct cross-border banking activities into the jurisdiction without establishing a local presence or obtaining local authorisation, and what limitations or conditions apply?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>When a foreign bank intends to engage in banking business in Japan, it must establish a branch in Japan and obtain a license as a foreign bank branch. A foreign bank with a certain capital relationship with a Japanese bank (including a licensed foreign bank branch in Japan) may have its business conducted in Japan through agency or intermediation by such a bank, provided that the bank obtains approval from the Prime Minister.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What legal forms are permitted to operate banks in the jurisdiction (e.g. public company, private company, subsidiary or branch), and what are the key regulatory considerations associated with each structure?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Banking activities may be carried out either by a locally incorporated bank or by a branch of a foreign bank, each subject to different regulatory frameworks under the Banking Act and supervisory guidelines.<\/p>\n<p>A locally incorporated bank must be established as a Japanese joint-stock company (kabushiki-kaisha). Foreign banks may operate in Japan through licensed branches. A branch has no separate legal person-ality and operates as part of the foreign head office. Foreign bank branches are not covered by Japan\u2019s deposit insurance scheme, whereas locally incorporated subsidiaries of foreign financial institutions are eligible for deposit insurance protection.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the jurisdiction impose any structural separation or ring-fencing requirements on banks or banking groups, and what practical challenges do these create for group structures and operations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan does not impose a ring-fencing requirement comparable to those adopted in jurisdictions such as the UK, and there is no requirement to structurally separate retail banking activities into a legally and economically independent sub-group.<\/p>\n<p>Instead, so-called \u201cfirewall\u201d regulations apply between banks and securities entities within the same group, primarily limiting the sharing of customer and non-public information to address conflicts of inter-est and customer protection concerns. These measures constitute information-barrier and conduct regu-lation, not capital or balance-sheet ring-fencing. It is often noted that restrictions on information sharing between banks and securities entities, together with complex consent and opt-out management, hinder seamless client coverage and slow integrated group-wide service delivery.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What governance, risk management and internal control requirements apply to banks, including expectations regarding board composition, management oversight, committee structures and organisational culture?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Banking Act requires locally incorporated banks to adopt one of the corporate governance structures permitted under the Companies Act and to maintain specific corporate organs, including a Board of Di-rectors, an appropriate audit and supervisory body (a Board of Company Auditors, an Audit and Supervi-sory Committee, or a Nominating Committee, etc. structure), and a Financial Auditor.<\/p>\n<p>Banks are required to maintain robust risk management systems covering credit, market, liquidity and operational risks, supported by effective compliance and internal audit functions that are independent from business lines. Supervisors also place strong emphasis on organisational culture, requiring banks to promote ethical conduct, risk awareness and a strong compliance mindset throughout the organisation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What operational resilience requirements apply to banks, including expectations relating to critical or important business services, impact tolerances, and the management of operational disruptions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The operational resilience requirements applicable to banks are designed to ensure stability of the finan-cial system and protect users. Banks are first required to identify their &#8220;critical business services&#8221; such as settlements, deposits, and loans, and analyze the possible impact of disruptions of these services on customers, financial markets, and the real economy. Next, they must determine the maximum level at which service disruptions can be tolerated and set it as their respective &#8220;impact tolerance levels&#8221;, and maintain or restore services within the said levels in cases of serious events likely to occur, such as sys-tem failures, natural disasters, pandemics, and cyberattacks.<\/p>\n<p>Emphasis is also on understanding their own resources (e.g., business processes, IT systems and as-sets, data, personnel, and subcontractors) and interdependencies among those to identify and remediate vulnerabilities. In addition, banks are expected to conduct tabletop exercises and practical scenario tests on a regular basis concerning the effectiveness of their recovery plans and alternative procedures, and reflect the results in management decisions. Business resilience is thus regarded important as a core element of business management that needs continuous upgrading, rather than just as a part of the BCP.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory expectations apply to banks\u2019 outsourcing arrangements, including the use of cloud service providers and reliance on critical third-party service providers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Banks\u2019 outsourcing contracts are subject to regulations under supervisory guidelines from the perspective of &#8220;third-party risk management&#8221; based on the assumption of banks\u2019 dependence on third parties including cloud service providers. Banks must assess the impact of outsourcing on their critical business services and build appropriate risk-based management systems.<\/p>\n<p>In addition, the &#8220;Guidelines on Cybersecurity for the Financial Sector&#8221; developed by the FSA clearly states that financial institutions must identify and classify the third parties they use, assess the roles, importance, and risks of each third-party, and manage the third parties based on the assessed risks. Specifically, financial institutions are required to conduct pre-contract due diligence; clarify the scope of services to be provided, roles and responsibilities of each party, and security requirements in the contract clauses; continue monitoring and assessments of the third parties, and develop an exit strategy for terminating the contracts. In addition, financial institutions are expected to evaluate and monitor important third parties, including their incident response plans and contingency plans. Such a framework extends beyond the existing contractor management to address risks posed in the whole supply chain, which is expected to minimize the risk of service disruption arising from dependence on third parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do environmental, social and governance (ESG) and climate-related regulatory requirements affect banks, including governance, risk management, disclosures and prudential supervision?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>ESG and climate-related regulatory requirements have a broad impact on banks&#8217; governance, risk man-agement, disclosure, and prudent supervision. In terms of governance, the board of directors and man-agement are required to integrate climate change risks into the management strategies and clarify their responsibilities for supervising such risks. In terms of risk management, on the other hand, it is increas-ingly becoming important to incorporate physical and transition risks arising from climate changes into credit risks, market risks, operational risks, etc., and to assess and manage their medium- to long-term impacts through scenario analysis and stress testing.<\/p>\n<p>In addition, the disclosure requirements under international frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) stipulate banks to disclose quantitative and qualitative information on climate-related governance, strategy, risk management, and indices and targets. This should enhance market discipline and deepen the dialogue with stakeholders. As the supervisory authorities monitor banks&#8217; responses and engage in dialogue with banks or give them recommendations for improvement as needed, climate response has become a criti-cal factor in ensuring the maturity of the overall business management system of a bank.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory restrictions or requirements apply to banks' remuneration policies, including bonus caps, deferral, malus and clawback, and how are these enforced in practice?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Comprehensive Supervisory Guidelines for Major Financial Institutions set forth the following key considerations regarding the design and implementation of compensation systems:<\/p>\n<ul>\n<li>The compensation committee or equivalent body is responsible for overseeing the compensation framework for officers and employees, ensuring its appropriate design and implementation. To fulfill this role, the committee is required to have an authority and structure that is independent from the business promotion divisions and exercise careful control to ensure that compensation levels do not adversely affect financial soundness or capital adequacy.<\/li>\n<li>The compensation system must be aligned with risk management. In particular, the compensa-tion for risk management and compliance divisions must be determined independently, incorpo-rating a mechanism that properly evaluates the achievement of risk management and compli-ance objectives. Additionally, the proportion of performance-linked compensation should be set at an appropriate level, taking into account job responsibilities, business operations, and the fi-nancial soundness of the banking group as a whole.<\/li>\n<\/ul>\n<p>While formal requirements for deferral, malus or clawback are not mandated, supervisors review remu-neration practices through ongoing monitoring and inspections and may require corrective measures where compensation structures are deemed to incentivise excessive risk-taking.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your jurisdiction implemented the Basel III framework with respect to regulatory capital? Are there any major deviations, e.g., with respect to certain categories of banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The FSA has developed domestic regulations based on the Basel Committee\u2019s publications: \u201cBasel III: Finalising post-crisis reforms\u201d (published in December 2017) and the final document on \u201cMinimum Capital Requirements for Market Risk\u201d (published in January 2019). The FSA has developed these domestic regulations in the form of announcements, supervisory guidelines, and FAQs, and has been implementing Basel III requirements in phases from 2023 based on these regulations.<\/p>\n<p>Specifically, on March 31, 2024, the FSA implemented Basel III requirements with respect to financial institutions subject to uniform international standards and financial institutions subject to domestic standards that adopt internal models, except for final designated parent compa-nies; furthermore, on March 31, 2025, the FSA implemented Basel III requirements with re-spect to financial institutions subject to domestic standards that do not adopt internal models, and also to final designated parent companies. In Japan, uniform international standards are applied to banks with overseas business locations (such as overseas subsidiaries or branches), and domestic standards are applied to other banks.<\/p>\n<p>The requirements of Basel III in Japan include the following: from the viewpoint of strengthening the quality and quantity of core capital for enhancing the soundness of banks, banks subject to international standards are required to have not only a total equity capital ratio of 8% or more but also a Tier1 ratio of 6% or more, a Common Equity Tier1 ratio of 4.5% or more, and a capi-tal buffer (being implemented in phases since 2016). Banks subject to domestic standards, on the other hand, are required to have a total equity capital ratio (core capital\/risk assets) of 4% or more. In the event that a bank falls below the applicable minimum required level, it will be subject to an early corrective action (e.g., submission of a business improvement plan or capital enhancement plan).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any requirements with respect to the leverage ratio?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan introduced the leverage ratio requirement for banks subject to uniform international standards first in 2015 as a disclosure requirement (Pillar 3) and then in 2019 as the minimum capital requirement (Pillar 1). The leverage ratio requirement mandates that banks maintain a leverage ratio of 3% or more, where the ratio is calculated by dividing the capital (Tier 1 capital) by the amount of exposure (the sum of on-balance items and off-balance-sheet items). In the event that a bank falls below the applicable minimum required level, an early corrective action will be triggered.<\/p>\n<p>On the other hand, in the fiscal quarter that ended on June 30, 2020, Japan introduced a time-limited measure to exclude &#8220;deposits with the Bank of Japan&#8221; from the amount of exposure that serves as de-nominator in the calculation above, in furtherance of financial institutions\u2019 lending capacity amid the Covid-19 crisis. In addition, from April 2024, Japan turned to a modified framework with the minimum capital requirement raised to 3.15%, or 3.20% for the Global Systemically Important Banks (\u201cG-SIBs\u201d), while keeping &#8220;deposits with the Bank of Japan&#8221; excluded from the amount of exposure.<\/p>\n<p>Further, Japan introduced leverage buffer requirements for G-SIBs in the fiscal quarter that ended on March 31, 2023, with extra 0.5% to 0.75% for Japanese banks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What liquidity requirements apply? Has your jurisdiction implemented the Basel III liquidity requirements, including regarding LCR and NSFR?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan introduced liquidity requirements for banks subject to uniform international standards first in 2015 with the Liquidity Coverage Ratio (LCR) requirement in phases, and then the Net Stable Funding Ratio (NSFR) requirement in the fiscal quarter that ended on September 30, 2021.<\/p>\n<p>With regard to the LCR requirement, banks are required to hold \u201chigh-quality liquid assets (\u201cHQLA\u201d: as-sets that can be liquidated without significant depreciation in times of financial stress and that do not have any obstacles to liquidation)\u201d in order to respond to a 30-day stress outflow. The LCR requires banks to have a liquidity coverage ratio of at least 100%, where the ratio is calculated by dividing the amount of the HQLA by the amount of net fund outflows (fund outflow minus fund inflow) during a 30-day stress period.<\/p>\n<p>The NSFR requirement calls on banks to maintain assets with a long average life or assets with low mar-ket liquidity to conduct stable funding over the medium to long term as a backbone of such assets. It also requires that the stable funding ratio, which is calculated by dividing the available stable funding amount (the sum of capital and funding from deposits and market) by the required stable funding amount (as-sets), be maintained at 100% or more.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which different sources of funding exist in your jurisdiction for banks from the national bank or central bank?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan does not have national banks. Instead, the central bank, the BOJ, manages monetary policy and liquidity.<\/p>\n<p>In Japan, banks obtain funding from the BOJ through multiple channels.<\/p>\n<p>The BOJ conducts purchases and sales of securities, such as government bonds, to guide short-term interest rates in financial markets and adjust liquidity. These operations help regulate the overall supply of funds in the market and keep interest rates within the target range. Banks benefit from the funds sup-plied through open market operations, using them for various transactions and lending activities.<\/p>\n<p>Additionally, the BOJ provides direct loans to banks facing short-term liquidity shortages, accepting col-lateral in exchange. This prevents temporary cash flow problems and helps maintain the stability of the financial system as a whole.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do banks have to publish their financial statements? Is there interim reporting and, if so, in which intervals?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Many banks are required to publish their financial statements either as listed companies or as sub-sidiaries of listed companies.<\/p>\n<p>Listed companies are required to disclose their financial results on a quarterly basis in accordance with listing rules.<\/p>\n<p>Additionally, under the FIEA, they are required to submit and disclose annual securities reports, which include financial statements, as well as semi-annual reports, which also include financial statements, every six months.<\/p>\n<p>Moreover, financial institutions such as banks, credit unions, and credit associations that are not listed companies are also required to make their disclosure report, including financial statements, available for public inspection every six months under the Banking Act and other related regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does consolidated supervision of a bank exist in your jurisdiction? If so, what are the consequences?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, Japan&#8217;s Banking Act is based on the principle of consolidated supervision of banking groups. For example, regulations on business scope apply not only to individual banks but also to entire banking groups. Similarly, capital adequacy ratio requirements and other financial soundness regulations are im-posed at both the individual bank level and the banking group level.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What reporting and\/or approval requirements apply to the acquisition of shareholdings in, or control of, banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the Banking Act, there are restrictions on major shareholders and bank holding companies.<\/p>\n<p>Holding companies that have banks as subsidiaries must obtain prior approval. Once approved, the hold-ing company is classified as a \u201cbank holding company\u201d and becomes subject to restrictions on its busi-ness scope, as well as group-wide financial soundness regulations.<\/p>\n<p>On the other hand, even if an entity is not a holding company, it must obtain prior approval if it intends to acquire 20% (or 15% in certain cases) or more of a bank\u2019s total voting rights. Shareholders who receive this approval are designated as \u201cbank\u2019s major shareholders\u201d and are subject to certain supervision by the FSA. However, bank\u2019s major shareholders are not subject to certain group-wide financial soundness regulations, such as capital adequacy ratio requirements, or group-wide business scope regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your regulatory regime impose conditions for eligible owners of banks (e.g., with respect to major participations)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Persons who acquired more than 5% of a bank\u2019s total voting rights must submit a notification on holding of voting rights in a bank to the director of the regional finance bureau within five business days.<\/p>\n<p>Additionally, individuals or entities intending to become a bank\u2019s major shareholders must obtain prior approval. The approval criteria include:<\/p>\n<ul>\n<li>No risk of undermining the sound and appropriate operation of the bank, (i) considering factors such as the source of funds for the acquisition, the purpose of shareholding, and other relevant matters and (ii) based on the financial position and income\/expenditure of the shareholder group; and<\/li>\n<li>The shareholder, based on their personal background and other relevant factors, must have a sufficient understanding of the public nature of the bank\u2019s business and possess adequate soci-al credibility.<\/li>\n<\/ul>\n<p>Furthermore, those intending to establish a bank holding company must obtain prior approval. The ap-proval criteria include:<\/p>\n<ul>\n<li>A favorable expected income and expenditure outlook for the holding company group;<\/li>\n<li>An appropriate level of capital adequacy relative to the assets held by the holding company group; and<\/li>\n<li>The holding company must have the necessary knowledge and experience to manage and oversee the bank in a fair and accurate manner, based on its personnel structure, and must al-so have sufficient social credibility.<\/li>\n<\/ul>\n<p>Additionally, bank holding companies must have the same corporate organs as banks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there specific restrictions on foreign shareholdings in banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The regulations for those who become a shareholders of a bank apply equally regardless of whether the shareholder is domestic or foreign.<\/p>\n<p>However, foreign investors must also comply with regulations on inward direct investment under the For-eign Exchange and Foreign Trade Act, which may include requirements such as post-acquisition report-ing.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a special regime for domestic and\/or globally systemically important banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Regarding capital adequacy ratio regulations, banking groups classified as G-SIBs or D-SIBs are required to maintain a G-SIBs\/D-SIBs buffer in addition to the capital conservation buffer by increasing their CET1 ratio.<\/p>\n<p>As of the time of writing, the G-SIBs\/D-SIBs buffer is set at:<\/p>\n<ul>\n<li>1.5% for MUFG;<\/li>\n<li>1.0% for Mizuho FG and SMFG; and<\/li>\n<li>0.5% for other D-SIBs.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the sanctions the regulator(s) can order in the case of a violation of banking regulations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In certain cases where one violates the banking regulations, such as operating banking businesses wit-hout a license, criminal penalties are imposed.<\/p>\n<p>For licensed banks, enforcement is generally carried out through administrative measures. Specifically, if a bank violates banking regulations, the FSA will investigate the facts and analyze the causes through orders to submit reports and on-site inspections. If a serious problem is identified, the FSA may issue orders to improve operations or orders to suspend operations. Additionally, the Prime Minister has the authority to revoke a bank&#8217;s license. Failure to comply with these administrative measures, submitting false reports, or evading on-site inspections may also result in criminal penalties.<\/p>\n<p>For less serious violations, such as failure to submit required notifications or violations of the prohibition on engaging in non-banking businesses, administrative penalties are imposed.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are client\u2019s assets and cash deposits protected?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Japan, deposits are protected under the Deposit Insurance System. This system operates by requiring financial institutions to pay deposit insurance premiums to the DICJ.<\/p>\n<p>However, some types of deposits are not covered by deposit protection, such as: foreign currency depo-sits.<\/p>\n<p>Even among protected deposits, the maximum coverage amount varies by deposit type:<\/p>\n<ul>\n<li>Settlement deposits are fully protected.<\/li>\n<li>Interest-bearing ordinary deposits and fixed-term deposits are protected up to 10 million yen, including accrued interest up to the date of bankruptcy.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What recovery and\/or resolution planning obligations apply to banks, and how are recovery and\/or resolution plans reviewed and assessed by supervisory authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan\u2019s approach combines (i) supervisory recovery planning expectations (mainly for systemic banks) and (ii) statutory resolution tools under the Deposit Insurance Act and related frameworks.<\/p>\n<p><strong>1. Recovery planning (going-concern)<\/strong><\/p>\n<p>In practice, Japanese G-SIBs (and certain D-SIBs) are expected to prepare and submit recovery plans, typically annually and also when there are material business\/group changes.<\/p>\n<p>Plans focus on credible recovery options (capital\/liquidity actions, asset sales, liability management, busi-ness measures), clear triggers and governance, and operational readiness (information production, liqui-dity monitoring, execution playbooks).<\/p>\n<p>Supervisors review plans through ongoing dialogue and can require remediation where options are not credible or execution capability is weak.<\/p>\n<p><strong>2. Resolution planning and resolvability (gone-concern)<\/strong><\/p>\n<p>Resolution planning is primarily undertaken by authorities, but banks (especially systemic groups) must provide information and support \u201cresolvability\u201d work (critical functions mapping, separability, operational continuity, valuation\/data readiness).<\/p>\n<p>Japan\u2019s bank resolution toolkit includes (a) payoff, (b) financial assistance \/ asset\u2013liability succession, (c) systemic risk measures (e.g., recapitalization\/temporary nationalization in limited systemic cases), and (d) the Orderly Resolution Regime.<\/p>\n<p>The Orderly Resolution Regime has been expanded beyond banks (e.g., to securities\/insurance\/financial holding companies) and can operate at the holding company level, including transfers to a bridge financial institution so core operations continue while residual losses are absorbed in the failing entity.<\/p>\n<p><strong>3. Review\/assessment cycle<\/strong><\/p>\n<p>Authorities conduct resolvability assessments generally at least annually or upon material change; cross-border groups are coordinated through CMGs.<\/p>\n<p>For covered systemic groups, TLAC\/LAC expectations function as a key resolvability lever, and supervi-sors assess adequacy in connection with the preferred resolution strategy.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction know a bail-in tool in bank resolution and which liabilities are covered? Does it apply in situations of a mere liquidity crisis (breach of LCR etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A characteristic feature of bail-in in processing bank failures in Japan is the provision that guidelines for issued corporate bonds include a rider to the effect that under certain conditions the principal will be re-duced. A bail-in provided for in the form of such a rider, is referred to as &#8220;contractual bail-in.&#8221; This con-cept is said to have been adopted in light of the constitutional requirement that careful procedures should be taken to change the substantive rights of creditors in Japan.<\/p>\n<p>Examples of specific methods of bail-in for resolving a failing bank in Japan include the following:<\/p>\n<p>In cases where the FSA\u2019s announcement stipulates, as one of the eligibility requirements for Additional Tier 1 (AT1) or Tier 2 (T2) capital, that in the event the issuer is determined to be unable to survive un-less measures, such as reduction of the principal, financial assistance by a public organization, or any other similar measure, be undertaken (such a situation is called &#8220;determinination of substantial bank-ruptcy&#8221;), a special provision calling for a reduction of the principal needs to be implemented. In Japan, the definition of &#8220;determination of substantial bankfuptcy&#8221; is interpreted in light of the framework of responses to a financial crisis involving financial institutions that are on the verge of failure under the laws and regulations in effect from time to time. Specifically, currently it is stated that this refers to cases in which a determination is made that it is necessary to take either Item 2 or Item 3 measures under the Deposit Insurance Act or in which a specific determination is made that it is necessary to take Item 2 measures. These determinations are made under the authority of the Prime Minister.<\/p>\n<p>When the Prime Minister makes a determination on the need for Item 2 or Item 3 measures under the Deposit Insurance Act or a specific determination on the need for Item 2 measures, the rider will have the effect of reducing the principal of AT1 or T2 capital or converting it into common shares, and the bank will be relieved or subjected to resolution of the failure at the expense of creditors and stockholders.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for banks to hold gone concern capital (\"TLAC\")? Does the regime differentiate between different types of banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Japan, the FSA issued an announcement (\u201cAnnouncement\u201d) based on the Banking Act and the Finan-cial Instruments and Exchange Act (\u201cFIEA\u201d) whereby the TLAC requirements have been applied to three megabanks (MUFG, SMFG, and MHFG), designated as the G-SIBs in Japan, and to Nomura Holdings, designated as one of the D-SIBs in Japan, from the end of March 2019 and from the end of March 2021, respectively (these four financial groups are collectively referred to hereafter as &#8220;4SIBs&#8221;).<\/p>\n<p>The Japanese TLAC requirements defines TLAC (Total Loss-Absorbing Capacity) as the sum of Gone Concern-based loss-absorbing capacity and Going Concern Capital for CET1 and AT1, and requires that a TLAC holding rate be maintained at 18% relative to risk-weighted assets and at 6.75% or more relative to leverage exposures (increased by 0.35% from 6.75% to 7.10% on April 1, 2024). In addition, in order to ensure sufficient loss absorbency on a Gone-Concern basis, at least one-third of these requirements is expected to be met by means of debt financing. Furthermore, to qualify for TLAC, the requirements of the Announcement must be satisfied, including structural subordination of the obligations, lack of securiti-es or guarantees, long-term nature, minimum face value, and prohibition of step-up interest rates.<\/p>\n<p>TLAC bonds of Japanese financial institutions are bail-in type financial instruments designed to absorb losses further after AT1 bonds and T2 bonds, and are issued as senior bonds of holding companies that are subject to TLAC requirements (i.e., corporate bonds that are repaid in preference to subordinated bonds in the event of bankruptcy).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a special liability or responsibility regime for managers of a bank (e.g. a \"senior managers regime\")?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Japan has introduced the fit and proper principle for bank executives, directors and corporate auditors. For example, a executive director must have the knowledge and experience to carry out the manage-ment of the bank accurately, fairly and efficiently, and must also have sufficient social credibility.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory, supervisory or market developments are likely to have the most significant impact on the banking sector in the jurisdiction over the next 12 to 18 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>While the tightening of AML regulations and the new Japanese framework for full-asset security interests (so-called \u201cEnterprise Value Charge\u201d) will have a significant impact on Japan\u2019s banking sector, the deve-lopment that is likely to have the greatest impact is the wider adoption of stablecoins.<\/p>\n<p>In Japan, amendments to the Payment Services Act introduced a statutory definition of stablecoins under the term \u201celectronic payment instruments.\u201d However, it was only in 2025 that issuance of JPYC, a Japa-nese yen\u2013denominated stablecoin, finally commenced. Going forward, the banking industry is also ex-pected to issue and distribute stablecoins using alternative trust structures. As financial transactions on blockchains become increasingly active, there is little doubt that traditional banking practices will be forced to undergo substantial change.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">5816<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/129482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=129482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}