Japan's FSA Panel Divided Over 1 Million Yen Stablecoin Transaction Cap

Japan's Financial Services Agency (FSA) placed the cap governing yen stablecoin issuance at the center of regulatory debate on Monday, releasing the hearing materials from the second meeting of its study group on digital and decentralized finance. The discussion focused on the 1 million yen per-transaction limit attached to Type 2 funds transfer businesses — the ceiling that constrains how yen stablecoins issued by non-bank providers can move through the financial system. Views within the panel diverged over whether the threshold remains appropriate, according to the materials.

Under Japan's Payment Services Act, funds transfer services are divided into categories. Banks operate as Type 1 funds transfer providers and are not subject to a statutory per-transfer ceiling, while non-bank operators registered as Type 2 providers must observe the 1 million yen limit on individual transactions. The cap has long functioned as a consumer-protection safeguard for smaller money transfer businesses, but its application to stablecoins has drawn growing attention as Japan's regulated stablecoin market takes shape. Because the ceiling attaches to the provider category rather than to the token itself, individual transfers above 1 million yen fall outside what a Type 2 registrant can handle — meaning the practical reach of a yen stablecoin in payments differs depending on whether it is issued through a bank or through a non-bank provider.

Japan established its stablecoin framework through revisions to the Payment Services Act that took effect in June 2023. Stablecoins, in this context, are digital tokens designed to maintain a stable value against a reference asset such as a fiat currency; the Japanese regime restricts issuance of fiat-backed stablecoins to licensed entities — banks, funds transfer service providers, and trust companies — and classifies the tokens as electronic payment instruments. In August 2025, JPYC received registration approval as Japan's first yen-denominated stablecoin issuer under the framework, adding practical weight to questions about how transaction limits interact with stablecoin-based payments.

The FSA's study group on digital and decentralized finance has been examining Japan's regulatory treatment of crypto assets, stablecoins, and web3-related financial services. Monday's hearing materials marked the second meeting of the panel, with the 1 million yen cap emerging as the key point of contention. Any adjustment to the limit would require changes to the underlying legal framework and would directly shape the operating conditions for banks and non-bank entities issuing yen stablecoins. How the panel's divergent positions develop in future sessions, and whether they advance toward formal amendments to the Payment Services Act, will shape the path for the rules governing yen stablecoin payments.

This content was first published on COINOTAG: Japan's FSA Panel Splits Over 1 Million Yen Stablecoin Cap