Financial Services Agency Requests Budget of Approximately 1.33 Billion Yen for Digital Finance Initiatives, 15 Times More Than Last Year, Supporting On-Chain Finance and Digital Payment Integration

Key Points of This Article

• Requesting 1.33 billion yen for digital finance initiatives, about 15 times the initial budget of the previous year
• Requesting an increase of 13 personnel to supervise cryptocurrency businesses and respond to new services
• Supporting the joint issuance of yen-denominated stablecoins by three major banks

Amount Requested for Digital Finance, About 15 Times Last Year

The Financial Services Agency has included 1.32765 billion yen in its budget request for fiscal year 2027 (Reiwa 9) under the initiative "Response to the Transformation of Financial Services Using Digital Technology." This is an increase of about 15 times from the initial budget of 88.22 million yen for fiscal year 2026. This was revealed in a policy evaluation document published on the 2nd.

Including previous initiatives, the initial budgets have fluctuated below 100 million yen, from 69 million yen in fiscal year 2023 to 88.22 million yen in fiscal year 2026. In the summary of the request, the Financial Services Agency cites "utilization of on-chain financial methods" and "promotion of the construction of payment systems linked with digital payments" as the main uses.

The total budget request for the Financial Services Agency is 40.3 billion yen, an increase of 13.4 billion yen from the previous year's budget. The digital finance initiatives are positioned as one of the pillars of the total 4.8 billion yen for "promoting growth investments to realize a 'strong economy.'"

Increase in Personnel for Supervising Cryptocurrency Businesses

In the staffing request, the agency has sought an increase of 13 personnel to strengthen the system for responding to new financial services. In addition to appointing a director for strengthening the monitoring system for "cryptocurrency exchange businesses," the supervisory system for electronic payment method providers will also be expanded.

This same group of 13 personnel also includes efforts to promote advanced payment using digital technology and to respond to risks associated with frontier AI. The overall staffing request for the agency is 32 personnel, with a net increase of 14 personnel after accounting for rationalization.

Cryptocurrency and Stablecoin Initiatives Rated as "Achieved"

In the performance evaluation report for fiscal year 2025 published alongside the budget request, the Financial Services Agency rated all measurement indicators related to cryptocurrency and stablecoins as "achieved." The Financial Services Council's "Working Group on Cryptocurrency Systems" compiled a report in December 2025, which led to the enactment of revised laws for the Financial Instruments and Exchange Act and the Payment Services Act in July 2026.

The revised laws transfer the regulation of cryptocurrency transactions from the Payment Services Act to the Financial Instruments and Exchange Act and introduce new insider trading regulations. The tax reform for fiscal year 2026 also includes measures to impose separate taxation on income arising from certain cryptocurrency transactions.

In June 2026, relevant government ordinances related to the revised Payment Services Act of 2025 were enacted. Key points include orders for domestic asset holdings for cryptocurrency exchange businesses and the establishment of "electronic payment methods and cryptocurrency service intermediary businesses," as well as the flexibility in managing and operating the backing assets of trust-type stablecoins.

In utilizing stablecoins, a payment enhancement project (PIP) was launched within the "Fintech Proof of Concept Hub." Support has begun for the joint issuance of yen-denominated stablecoins by three major banks and their use in cross-border remittances, as well as for interbank transfers of tokenized deposits.

On the international front, as co-chair of the FATF Cryptocurrency Contact Group, the agency has led discussions on the implementation of Recommendation 15, including the travel rule, and addressed new risks involving stablecoins, P2P transactions, and DeFi, contributing to the compilation of reports.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.