IMF Staff Country Reports

This technical note reviews the functioning and effectiveness of the regulation, supervision, and systemic risk monitoring of fintech in Japan. It focuses on the institutional arrangements for fintech monitoring, as well as the approach that the Japanese authorities have taken to review the regulatory perimeter around fintech-related issues, noting regulatory amendments on digital payments, banking, and crypto assets most notably. 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.