Japan is getting serious: by 2026, encryption accomplices must hold a certificate to operate.

The Japanese Financial Services Agency ( FSA ) announced a major reform - starting from 2026, any company engaged in encryption asset custody or trading services must obtain government registration permission to operate legally.

What is the crux of the problem?

On the surface, Japan's exchange regulation seems quite strict: most funds must be stored in cold wallets, and there are numerous internal control systems. However, there is a huge loophole in this set of rules—the parts outsourced to third-party service providers are not within the jurisdiction.

How deep is this pit in 2024? DMM Bitcoin has suffered huge losses. This leading Japanese exchange was attacked by hackers, losing 48.2 billion yen (, approximately 312 million dollars ) worth of Bitcoin. The key point is that the vulnerability was not in the exchange itself, but in the third-party software company Ginco. As a result, the outsourced service provider had no regulatory constraints, and user funds were still exposed to risk.

What do the new rules change?

All custodians and trading service providers used by the exchange in the future must:

1. You must sign up in advance to meet government security standards.
2. The exchange can only use service providers from the officially approved list.
3. Any third party involved with user assets shall be uniformly regulated at the exchange level.

On November 7th, the Japanese Financial System Committee ( voted in support of this reform, advising the Prime Minister with ), which is expected to submit formal legislation during the 2026 parliamentary session.

What does this mean for users?

From a positive perspective: Your coins will no longer suffer because the exchange found an unreliable outsourcing team. All chains must pass security checks.

Interestingly, Japan's recent actions have been rhythmic. This year, the FSA has approved the first yen stablecoin JPYC and is supporting stablecoin pilot projects by three major banks ( Mizuho, MUFG, and SMBC ). While enforcing strict regulations, Japan is actively embracing digital finance, making it clear that it wants both safety and innovation.