Japan’s 2025 Payment Services Act Amendments: What to Watch as June 2026 Approaches

Japan enacted significant amendments to the Payment Services Act (PSA) in June 2025, targeting remittance services, cross-border payment models, crypto-assets, and stablecoins. These reforms are designed to enhance user protection, strengthen AML/CFT safeguards, and support innovation in digital finance.

Implementation Timeline

The amended PSA was promulgated on 13 June 2025 and is required to be brought into force within one year, meaning the new framework must be implemented by 13 June 2026. As of early 2026, the Financial Services Agency (FSA) is finalising the necessary Cabinet Orders and Cabinet Office Ordinances to operationalise the reforms.

Key Points of the Reform

1. Faster User Protection for Remittance Services

A new optional safeguarding mechanism allows banks or trust companies to reimburse users directly if a fund transfer operator fails, without relying on the traditional deposit (kyotaku) process. This aims to ensure quicker refunds while maintaining existing safeguarding options.

2. Clear Regulation of Cross-Border Collection Services

The amendments clarify that many cross-border collection agency services qualify as regulated fund transfer transactions unless they fall within specified exemptions. This change reflects increased regulatory focus on cross-border payment risks and applies even where services are provided through multi-layered outsourcing structures. Transitional relief is available, but affected businesses should prepare early for registration or restructuring.

3. New “Intermediary-Only” Category for Crypto and Payment Services

A new registration category has been introduced for businesses that only act as intermediaries for crypto-asset or electronic payment instrument transactions on behalf of licensed providers. This framework lowers entry barriers for platform and app-based models while imposing tailored conduct obligations.

4. Greater Flexibility for Stablecoin Reserve Assets

Trust-type stablecoin issuers will be permitted, subject to detailed conditions, to manage reserve assets beyond demand deposits (for example, certain short-term government bonds), aligning Japan’s framework more closely with global standards.

5. Expanded Supervisory Powers

The amended PSA expressly authorises regulators to order domestic retention of assets held by crypto exchanges and electronic payment instrument providers, strengthening tools to protect users in stress or insolvency scenarios.

Next Steps Toward June 2026

On 16 December 2025, the FSA published draft Cabinet Orders and Cabinet Office Ordinances and opened them for public comment, marking the final phase of rulemaking.

These drafts address critical implementation details, including:

• registration and conduct rules for the new intermediary category;

• specific conditions for stablecoin reserve asset management;

• exemptions and scope for cross-border collection services; and

• operational requirements for new safeguarding methods.

The FSA is expected to finalise these regulations in time for the PSA amendments to take effect by June 2026. Businesses should closely monitor the final rules and begin compliance planning now, particularly where licensing, restructuring, or system changes may be required.