Japan: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Fintech

IMF Staff Country Reports, May 13, 2024

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Canonical URL: Japan: Financial Sector Assessment Program-Technical Note on Regulation and Supervision of Fintech

This technical note reviews the functioning and effectiveness of the regulation, supervision, and systemic risk monitoring of fintech in Japan.
Focus areas include: institutional arrangements for fintech monitoring; the approach the Japanese authorities have taken to review the regulatory perimeter around fintech-related issues; and notable regulatory amendments on digital payments, banking, and crypto assets.
The fintech market is growing in Japan, mostly concentrated in the digital payments sphere.

The Financial Services Agency (FSA) monitors fintech developments through various channels and responds as needed with targeted regulatory initiatives.
Going forward, the FSA could:
- strengthen its customer education and enforcement efforts regarding crypto; and
- further tailor the regulatory framework to the particularities of crypto assets, particularly regarding market integrity.
The FSA could enhance its efforts to educate the public on the risks regarding crypto assets and the overall functioning of crypto asset markets, beyond the issuance of warnings and alerts.

The fintech market in Japan is mostly concentrated in the digital payments sphere.
Regulatory amendments of note concern digital payments, banking, and crypto assets.

The Financial Services Agency (FSA) is the primary authority monitoring fintech developments.
Monitoring is carried out through various channels and leads to targeted regulatory initiatives as needed.

Strengthen customer education on crypto asset risks and the overall functioning of crypto asset markets, expanding beyond warnings and alerts.
Enhance enforcement efforts related to crypto.
Tailor the regulatory framework to the particularities of crypto assets, with a focus on market integrity.