Japan’s Financial Services Agency will allow qualifying foreign-issued stablecoins to circulate in Japan as electronic payment instruments starting June 1, 2026. The amended Cabinet Office Ordinance, finalized May 19 after a public comment period that drew 16 responses, recognizes trust-based stablecoins issued under foreign law as payments products rather than securities. The change opens one of Asia’s most heavily regulated digital asset markets to U.S. dollar-backed tokens such as USDC, provided their issuers meet Japan’s equivalence standards.
A stablecoin is a cryptocurrency whose value is pegged to an outside asset, usually a fiat currency like the U.S. dollar, and backed by reserves held in cash, short-term Treasuries, or a similar instrument so the price stays near a fixed redemption value.
Key takeaways
- Effective June 1, 2026: Japan’s FSA will treat qualifying foreign trust-based stablecoins as electronic payment instruments under the Payment Services Act, not securities under the Financial Instruments and Exchange Act.
- Equivalence test: Issuers must operate under foreign licensing, reserve, audit, and supervisory regimes the FSA deems comparable to Japan’s, and their home regulator must be able to share oversight information with the FSA.
- Market opening: The rule clears the way for licensed Japanese intermediaries to handle tokens like USDC for payments, ending uncertainty left by the 2022 Payment Services Act amendment that only covered domestic issuers.
- Policy backdrop: The same day, Japan’s Liberal Democratic Party released a roadmap calling stablecoins “core infrastructure” for an AI-driven, always-on payments system, citing roughly ¥45 trillion (~$290 billion) in global stablecoin circulation.
Published: May 25, 2026 09:00 UTC
Why this matters
Until now, foreign-issued stablecoins sat in a legal gray zone in Japan. The country’s 2022 Payment Services Act amendment created a framework for stablecoins issued by Japanese trust banks and licensed banks, but offered no clear path for tokens minted abroad. Operators that wanted to list a U.S.-issued stablecoin risked being told the asset was a security under the Financial Instruments and Exchange Act, with all the disclosure and licensing burden that classification triggers.
The revised ordinance closes that gap. The FSA has explicitly excluded eligible foreign trust beneficiary rights from the definition of securities, and added them to the catalog of electronic payment instruments that licensed exchange operators and payment service providers can handle. The change applies specifically to trust-based stablecoins, a structure in which token holders hold a beneficiary claim against reserve assets held by a trustee.
Stablecoin issuers tracked by industry data sources reported roughly $290 billion in circulating supply globally heading into May, dominated by Tether’s USDT and Circle’s USDC. Japan’s previous framework allowed almost none of that supply to flow through licensed Japanese payment channels.
How the equivalence test works
The FSA will assess foreign issuers on four pillars: reserve asset management, audit requirements, redemption rights for token holders, and the ability of the home-country regulator to share supervisory information with the FSA commissioner on request. Tokens linked to elevated money laundering or criminal risk may be ruled out regardless of how the issuer is licensed at home.
This mirrors the structure of Japan’s domestic stablecoin rules, which require segregated reserves, regular third-party audits, and 1:1 redemption at par. Foreign issuers that already operate under U.S. trust charters, the European Union’s MiCA framework, or Singapore’s Major Payment Institution licensing have a clearer route to qualification than issuers in jurisdictions with looser oversight.
The policy backdrop
The ordinance landed on the same day Japan’s ruling Liberal Democratic Party published a national strategy proposal on AI and on-chain finance. The report, from the LDP’s Digital Society Promotion Headquarters and its Next-Generation AI and On-Chain Finance Initiative, described stablecoins and tokenized deposits as the core rails for a payments system built around automated, always-on settlement.
The LDP paper warned that Japan risks falling behind if it does not modernize its payment infrastructure, and called for clearer stablecoin rules, interoperability between yen-based and foreign stablecoins, and more work on tokenized deposits and wholesale central bank settlement. Pairing the LDP roadmap with the FSA ordinance signals a coordinated push to keep Japan competitive as the U.S. implements the GENIUS Act and the European Union enforces MiCA.
What comes next
The first test will be which issuers move first. Circle has publicly pursued international licensing across multiple jurisdictions, and a Japan listing through a licensed local intermediary would extend USDC’s regulated footprint into a market with roughly $4 trillion in household financial assets. Tether’s regulatory profile is more complicated, and the FSA’s reserve and audit standards may pose a harder hurdle.
For Japanese exchanges and payment processors, the rule converts foreign stablecoins from a compliance risk into a product line. Expect listings, on-ramp partnerships, and merchant payment pilots to follow once licensed operators complete their internal compliance reviews. The FSA can revisit equivalence designations as foreign frameworks evolve, so the door is calibrated rather than fully open.
Frequently asked questions
What is a trust-type stablecoin?
A trust-type stablecoin is one where reserves backing the token are held by an independent trustee on behalf of token holders, who hold a beneficiary claim against those reserves. The structure separates the issuer’s corporate balance sheet from the reserve assets, giving holders a stronger legal claim if the issuer fails. Japan’s domestic stablecoin framework uses this model, and the FSA’s June 1 rule extends the same treatment to qualifying foreign issuers.
Will USDT and USDC be available in Japan on June 1?
Not automatically. The rule creates the legal pathway, but each foreign issuer still needs to be assessed against Japan’s equivalence standards, and each Japanese intermediary that wants to list a token still needs internal approval and operational readiness. Expect a rolling launch as licensed operators complete due diligence rather than a single switch-flip on June 1.
How does this compare to the U.S. GENIUS Act?
The GENIUS Act, passed in 2025, set a federal U.S. framework for payment stablecoin issuers covering licensing, reserves, custody, and capital, with final rules expected by mid-2026. Japan’s approach is narrower: rather than create a new licensing regime for foreign issuers, the FSA recognizes equivalence with the issuer’s home regulator and pulls qualifying foreign tokens into the existing Payment Services Act. The two frameworks are designed to be interoperable rather than identical.
