Japan FSA Opens Public Consultation on Bond Standards for Yen Stablecoin Reserves Until February 27

FSA opens stablecoin bond consultation

Japan's Financial Services Agency (FSA) opened a public consultation on 27 January 2026 on bonds that stablecoin issuers use as reserves for yen tokens. The consultation focuses on issuers of so-called stablecoins, which are digital tokens designed to track the value of a reference currency, such as the Japanese yen.

Tight timeline and consultation deadline

The comment window runs until 27 February 2026, creating a 31-day period for banks, exchanges, and issuers to respond. The FSA will use the responses to shape final reserve bond standards linked to the 2025 Payment Services Act.

Strict thresholds for eligible foreign bonds

The draft rules state that foreign bonds in stablecoin reserves need a top credit rating in the domestic scoring scale, defined as grades “1” or “2.” Issuers of those foreign bonds must also have at least 100 trillion yen in outstanding debt, which limits eligibility to very large issuers.

Link to Japan's updated regulations

The consultation implements parts of the amended Payment Services Act of 2025, known as Act No. 66, which covers stablecoin issuance and reserves. The law requires stablecoin issuers to hold customer assets as trust beneficiary interests, backed by specific reserve instruments including bank deposits and designated bonds.

Domestic yen stablecoins enter the market

Japan's first fully regulated yen stablecoin, JPYC, launched on 27 October 2025 under the new framework. JPYC uses bank deposits and Japanese government bonds as backing, which matches the reserve types under discussion in the FSA consultation on bond standards.

“As the BOJ reduces its bond buying, stablecoin issuers could become the largest holders of JGBs in the coming years”, November 2025. — Noritaka Okabe, Founder and CEO, JPYC Inc.

Possible impact on bond demand

Speculation: If the FSA adopts strict reserve rules, stablecoin issuers may hold more Japanese government bonds over time. This scenario would follow the tightening of eligibility criteria for bonds in yen stablecoin reserves described in the consultation.