(Reuters) -Japan’s financial regulator is considering allowing members of banking groups to launch cryptocurrency trading services, in a move to expand market access and encourage competition, the Nikkei reported on Wednesday.
Japan’s Financial Services Agency (FSA) is also considering lifting the ban on banks buying and holding cryptocurrencies for investment.
Currently, subsidiaries of banking groups cannot register with the regulator for cryptoasset services under the Banking Law.
The regulator did not immediately respond to a Reuters request for comment.
The FSA aims to review regulations so that securities subsidiaries of banking groups can provide cryptoasset services, a measure designed to expand market access and allow them to compete on equal terms with their peers from securities company groups, according to the report.
The current space is mainly dominated by affiliates of securities groups such as Rakuten Wallet, a subsidiary of Rakuten Securities and a unit of SBI Holdings.
Given the strong volatility of cryptocurrencies and the potential for large losses, the FSA will require bank-affiliated securities firms to provide clear explanations of these risks to retail investors, Nikkei added.
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Anil D’Silva)