April 16, 2025
By Anjali Kochhar
In a bold step toward more refined crypto oversight, Japan is proposing a two-tier regulatory framework designed to distinguish between types of players in the Web3 space especially as decentralized finance (DeFi) continues to grow.
Rather than applying a blanket rule to every crypto entity, the Japanese Financial Services Agency (FSA) wants to draw a line between token issuers and wallet service providers.
1. Token Issuers – Higher Responsibility, Higher Impact
Token issuers whether they’re launching stablecoins, NFTs, or other digital assets would fall under a stricter compliance tier. These entities would be required to offer detailed operational disclosures, undergo independent audits, and ensure alignment with existing financial and consumer protection laws. The thinking here is simple: if you’re creating something that holds monetary value, you should be held to financial industry standards.
2. Wallet Providers – Lighter Regulation, Stronger Security
Digital wallet providers, on the other hand, would face a different kind of oversight. Instead of being judged on financial criteria, these platforms would focus on data protection, user security, and fraud prevention. Since wallets primarily function as storage and transfer tools, the FSA sees no need to burden them with the same regulations as token issuers.
This division, Japanese officials argue, allows for smarter, more adaptive regulation one that doesn’t stifle innovation but still protects users. It’s a direct response to the limitations of current global standards, which often fail to differentiate between centralised companies and decentralised platforms.
Japan’s move could influence how other countries craft crypto rules. By embracing a flexible yet structured model, the nation is positioning itself as a global leader in regulatory clarity especially important as Web3 businesses become more mainstream.
This proposed structure is still in discussion, but if implemented, it would mark one of the most nuanced approaches to digital asset oversight so far encouraging growth, while keeping consumer protection front and center.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
