In a significant move to enhance its cryptocurrency market, Japan has approved reforms aimed at easing regulations for crypto brokerages and stablecoin issuers. The Cabinet has endorsed amendments to the Payment Services Act, which will now be presented to the National Diet for final approval. These changes are expected to pass without opposition, given the Diet's history of supporting Cabinet-approved crypto reforms.

The reforms introduce a new category for crypto brokerages, classifying them as "intermediary businesses." This classification will allow brokerages to operate without needing the same permits as crypto exchanges or wallet operators, reducing entry barriers for new players. Major companies like Mercari, SBI Securities, and Monex Securities are already preparing to launch brokerage services.

Stablecoin issuers will also benefit from increased flexibility in backing their digital currencies. Currently, they must match stablecoin supply with cash deposits in regulated banks on a 1:1 basis. The new rules will permit the use of Japanese and U.S. government bonds with a maturity of three months or less as collateral, up to a maximum of 50%. The remainder must be held in current accounts.

These reforms are part of Japan's broader strategy to establish itself as a global hub for cryptocurrency and blockchain technologies. By simplifying the regulatory framework, Japan aims to foster innovation and attract more investment in the digital asset space.