[DigitalToday reporter Chi-kyu Hwang (황치규)] Japan's Financial Services Agency (Financial Services Agency) released a draft administrative notice detailing a stablecoin regulatory framework in line with a sweeping overhaul of the Payment Services Act, The Block reported on Monday.

The draft includes eligibility requirements for stablecoin reserve assets and supervisory guidance that existing traditional financial institutions must follow when intermediating crypto-asset services.

The FSA will hold a public hearing to collect opinions from the industry and the public through Feb. 27, 2026.

A key part of the bill is regulatory standards limiting the scope of stablecoin reserve assets. Under the draft, for bonds issued overseas to be recognized as reserve assets, they must receive a credit rating from a designated rating agency. The issuer's total outstanding issuance must be at least 100 trillion yen. The requirements are interpreted as aimed at ensuring liquidity and reliability of reserve assets.

The draft adds a provision requiring financial institutions and their subsidiaries to provide customers with sufficient explanations of risks if they are involved in cryptocurrency brokerage services. The FSA explained it aims to prevent situations in which users underestimate risks because of the brand or reputation of traditional financial groups.

New review requirements were also added for companies seeking to handle stablecoins issued overseas. The draft requires applicants to explain that the overseas issuer will not issue, redeem or solicit to general users in Japan. The FSA said it plans to promote information-sharing cooperation with overseas regulators for this purpose.