Financial Services Agency Reviews DeFi Regulations, Nomura Calls for Standards Equivalent to Overseas, Stablecoins and Tokenization Also Discussed in First Meeting of Research Group for FY2028

Key Points of This Article

• Financial Services Agency's research group begins examination of regulations for DEX, DeFi, and tokenization
• Nomura HD requests regulations for DeFi and wallets to be equivalent to those overseas
• Public-private forum to compile interim report and roadmap by early 2027

Examination of DEX, DeFi, and Asset Tokenization

On the 20th, the Financial Services Agency (FSA) held the first meeting of the research group on "Approaches to Digital and Decentralized Finance" for FY2028. The main discussion points include stablecoins, tokenization of deposits, security tokens, DEX (decentralized exchanges), and DeFi (decentralized finance). The aim is to identify legal and institutional challenges from both innovation promotion and investor protection perspectives.

The research group is based on the "Financial Strategy to Promote Growth Investment" published by the FSA on July 21. The agency has established the "On-Chain Financial Forum for the AI Era" in collaboration with relevant ministries and set up two research groups.

This research group is responsible for creating an environment to develop on-chain finance, while the other focuses on the healthy utilization of AI and other technologies. The forum plans to compile an interim report and a public-private roadmap by early 2027. The chair is Professor Emeritus Hideki Kanda from the University of Tokyo. The Japan Cryptocurrency Exchange Association and the Bank of Japan are also participating as observers.

The secretariat's materials explain that a tokenization market is emerging that completes transactions from agreement to settlement on the blockchain. If both payment methods and assets are tokenized, it could lead to significant reductions in trading and settlement periods, allowing for 24/7 transactions. The cumulative issuance of tokenized assets exceeded $35 billion as of July 2026, with projections suggesting the global market could reach $18.9 trillion by 2033.

DEX and DeFi were identified as subjects for examination regarding "risk reduction measures" alongside wallet providers in the financial strategy. A working group on cryptocurrency systems concluded in its report in December 2025 that a clear regulatory approach for DEX has not yet been established.

Furthermore, it was noted that businesses providing UIs for apps connecting to DEX for domestic residents need to deepen their understanding of the actual situation, keeping in mind the obligation to explain risks and implement anti-money laundering measures, including identity verification.

The secretariat's materials also referenced the DeFi report published by the FATF (Financial Action Task Force) in July. This report suggests indicators for identifying DeFi controllers and recommends changing regulatory responses based on the presence or absence of controllers and their identification.

Nomura Requests Wallet Regulations to Match Overseas Standards

During the hearing, Toshinori Sasaki, head of digital asset strategy at Nomura Holdings (Nomura HD), provided an explanation. He noted that while stablecoins and tokenized deposits are at the practical stage in the U.S., Japan remains at the demonstration stage, analyzing it as "one step behind." He urged for prompt development of on-chain government bonds and stocks.

The company listed ten practical and legal challenges. For services like DeFi using smart contracts, they requested regulations that offer a high degree of freedom equivalent to those overseas, rather than ahead of them. Regulations for wallets and DeFi should be established similarly to overseas standards once the direction for global development is determined.

They requested that excessive regulations not be imposed on wallet providers that do not manage users' private keys. They also included a review of the restrictions on domestic use of overseas-issued stablecoins, particularly regarding holdings and transfers exceeding 1 million yen.

Recommendations for Securitization Based on Public Chains

Securitize Japan reported that the market capitalization of RWA (real-world asset) tokens reached $39 billion by the end of September, with an average annual growth rate of 195% over the past three years. They also mentioned that the SEC in the U.S. adopted measures on September 17 to exempt certain tokenized U.S. listed stocks from exchange registration obligations for a limited period of five years, provided they meet specific requirements.

As a recommendation for Japan, they suggested the establishment of a legal system assuming a decentralized tokenization model, including a review of the Securities Depository and Clearing Corporation. They called for the creation of a system that anticipates institutional investor-level DeFi use and designs based on public chains. They pointed out that "a unique path lacking international compatibility" could incur time and costs and further widen the gap with overseas developments.

The secretariat asked the committee members to identify priority areas for consideration based on the progress of tokenization and on-chain finance. They also sought opinions on points to consider when examining the shortening and enhancement of securities settlement.