On June 6, Japan’s parliament officially revised the Payment Services Act (PSA), introducing a domestic asset holding order aimed at preventing crypto outflows and protecting Japanese investors from the risks of overseas crypto exchange collapses.
The revision is a direct response to the rising bankruptcy risks among foreign crypto exchanges. When such platforms collapse, the crypto assets held by Japanese investors are often at risk of outflows or loss.
In 2024, a major crypto exchange in Japan was hacked, leading to a Bitcoin outflow worth over $305 million. The incident raised serious concerns about the security of customer funds and highlighted the need for stricter regulations.
The law passed both the Lower House in May and the Upper House on June 6. It will be enforced within a year. Japan is also introducing a new category for businesses that facilitate interaction between exchanges and users, encouraging innovation in crypto asset services while tightening oversight.
Japan’s proactive move shows a clear intent: protect domestic investors from foreign exchange failures, while fostering a safe and scalable crypto ecosystem. The revised Payment Services Act marks a significant step in balancing security, regulation, and innovation in Japan’s crypto space.
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