Bitunix Analyst: Japan’s FSA to Allow Banks to Hold Bitcoin — New Policy and Political Shift Ignite Nikkei Surge

On October 21st, significant policy breakthroughs took place in Japan's financial and crypto sectors. The Financial Services Agency (FSA) is in the process of drafting reforms that would permit Japanese banks to hold Bitcoin and other digital assets for investment purposes and to register as licensed crypto exchanges. If approved, this bill would put an end to the strict 2020 ban on direct crypto holdings and enable banks to allocate digital assets along with equities and bonds. The regulator intends to establish a comprehensive risk framework to safeguard financial stability while integrating banks into the crypto ecosystem - a move that has the potential to redefine Japan's standing in the global digital finance arena. At the macro level, Japan's economy is grappling with the dual pressures of high debt and deflationary risks. Legalizing digital asset allocation could create new avenues for capital flow and yield diversification. Given that major institutions such as MUFG and Mizuho are already developing stablecoin initiatives, policy liberalization is anticipated to make Japan a more assertive player in regional financial competition. Meanwhile, Sanae Takaichi is set to become Japan's first female Prime Minister and has pledged to extend expansionary "Abenomics-style" fiscal policies. After the announcement, the Nikkei 225 surged to record highs for two consecutive days as investors factored in prolonged low rates and increased industrial spending. Capital flows are clearly shifting from the yen and bonds to equities and crypto assets. Bitunix Analyst Insight: Japan's two inflection points - regulatory liberalization and political transition - signal a new cycle for Asian capital markets. Allowing banks to hold Bitcoin may elevate it to a "sovereign-grade asset," while the diverging trends in equities and currency markets suggest a structural repositioning of liquidity. The upcoming focus will be on the implementation details of regulations and the pace of institutional entry, which will shape the next volatility cycle and liquidity structure in the crypto markets.