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Japan is prepared to enable trust banks to handle crypto assets after a top financial regulator revealed plans to hammer out legislation that could become legally binding this year. According to the newspaper, Nikkei reported that the Financial Services Agency (FSA), the body that administers the banking sector and the domestic crypto industry, wants to “deregulate” trust banks, a move that will let these financial institutions handle coin deposits. The FSA stated that the move would allow the institutions to treat crypto as “true assets.” The agency also added that crypto assets were “volatile” and that trading in them “involves high levels of risk.”
The agency stated that its objective is to strengthen investor protection and promote correct market development by enabling trust banks to execute crypto-related asset management operations. The FSA plans to rectify financial sector-related legislation in order to implement the change and will hold a one-month consultation on its proposals before elevating its decisions into law. According to Nekkei, the move could become effective as early as autumn this year.
The news will come as a welcome development to the domestic banking sector. Last month, important revisions to the Funds Settlement Law were made, enabling conventional banks, asset transfer providers and trust banks to issue stablecoin that are fixed to the Japanese yen. The FSA is expected to issue further guidance relating to both security tokens joined to bonds and tokenized real estate. A number of Japanese firms have shown their desire to unveil security storm-related offerings as well as crypto-powered property projects.