What Japan's July FIEA Amendment Changes for Crypto and Tokenized Assets
Japan's parliament passed an amendment to the Financial Instruments and Exchange Act in July that treats crypto assets as financial products rather than as payment instruments under the Payment Services Act. The interview with Makoto Kihara, a Liberal Democratic Party lower-house member leading the party's next-generation AI and on-chain finance project team, frames the change as a deliberate first step toward a larger financial structure.
Kihara expects blockchain-based stablecoins, tokenized deposits, and tokenized bonds and equities to sit at the center of future financial transactions. In that model, customers delegate trading to AI agents while banks, securities firms and life insurers also use AI-facing front ends. Because blockchain offers pre-set execution conditions and tamper-resistant data, he argues AI-to-AI transactions can run continuously, across borders and language barriers.
The logic leads to a single multi-wallet consolidating accounts that are now split among banks and brokers, with services completed inside that wallet. Kihara says he has worked on crypto legal issues since the 2014 Mt. Gox collapse and founded the LDP's blockchain promotion league, but the direction changed after the US GENIUS Act and January's Davos discussions put on-chain finance on the agenda.
Kihara's 'Reiwa Financial Big Bang' Scenario for Banks, Brokers and Insurers
Why Kihara calls this the first step
The shift from the Payment Services Act to the FIEA is not just a labeling change. It brings crypto into the investor-protection and disclosure architecture used for securities, while also creating a regulatory home for tokenized deposits and securities. The interview presents stablecoins and tokenized assets as the long-term core of finance, so the amendment is an enabling move rather than a one-off fix.
Where the bank-securities-insurance boundary comes under pressure
Kihara's main claim is that AI-to-AI trading on blockchain reduces the need for separate intermediaries and account silos. The outcome he describes is a multi-wallet where banking, brokerage and insurance functions coexist. The reasoning: programmability and 24/7 operation lower coordination costs, while cross-border capability bypasses some national interface constraints. This is a structural vision, not a current balance-sheet fact, and it depends on implementation details that the published interview does not include.
The external trigger: US GENIUS Act and Davos
Kihara says his timeline shifted after the United States moved toward comprehensive stablecoin regulation and on-chain finance became a Davos theme. That suggests Japan's policymakers are responding partly to international competition rather than domestic demand alone, which raises the stakes for how quickly regulators produce detailed rules.
Next Moves for Japanese Financial Firms, Crypto Ventures and Investors
- For Japanese banks, brokers and insurers: treat the FIEA shift as a signal that tokenized deposits and securities are likely to gain a formal regulatory path; product teams should map current crypto-adjacent services against the existing Payment Services Act classification, since the July law removes the old payment-only framing.
- For crypto exchanges and token issuers: prepare for securities-style disclosure and investor-protection obligations now being introduced under the FIEA; the interview leaves the effective date and detailed rules unresolved, so the immediate work is to identify which tokens may fall into the new financial-product category.
- For Japanese investors and corporate users: the interview signals a future of tokenized instruments and automated execution, but the actual timetable depends on implementing regulation rather than on the lawmaker's vision.
Risk & Opportunity Assessment
| Commercial Risk | Medium | Kihara's proposed multi-wallet model could erode account and fee revenue for traditional banks, securities firms and insurers, but it remains a policy vision without adopted implementing rules. |
| Competitive Risk | High | The FIEA amendment creates a regulatory on-ramp for tokenized assets, potentially favoring crypto-native and cross-border players over incumbents; Kihara explicitly predicts that walls between banking, securities and insurance will thin. |
| Regulatory Risk | Medium | The framework law has passed, but detailed treatment of stablecoins, tokenized deposits and tokenized securities is still being shaped, leaving firms with compliance uncertainty. |
| Reputation Risk | Low | This interview includes no direct customer trust or scandal element, though poorly implemented rules could later damage confidence in tokenized products. |
| Technology Disruption | Transformational | Kihara expects AI agents and blockchain to automate 24/7 cross-border transactions and consolidate accounts into multi-wallets, a structural shift from current segregated financial interfaces. |
| Commercial Opportunity | High | Bringing crypto under the FIEA and treating tokenized assets as central could expand regulated markets for stablecoins, tokenized deposits, and tokenized equities and bonds. |
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