According to JZMOR Exchange, the Japanese Senate has recently passed amendments to the Payment Services Act, officially establishing the legal status of “crypto asset intermediaries.” This makes Japan one of the first major economies to clearly define the role of brokerage services at the legislative level. The core of this amendment is to send a clear signal: Japan is shifting its regulatory logic from “restricting market access” to “guiding compliant innovation.”
The amendment stipulates that companies providing only brokerage services (i.e., matching buyers and sellers without holding client funds or crypto assets) are exempt from registering as “crypto asset exchange operators.” This significantly lowers the threshold for market entry and is expected to stimulate a wave of tech-driven firms with capabilities in matching technology, order management, and liquidity integration to enter the market—driving the industry structure from centralization toward greater diversity.
By the end of 2024, Japan had 35 licensed crypto asset exchange operators. However, according to the Tokyo Financial Trading Technology Association, over 100 local companies plan to launch brokerage-type services. This legislation partially alleviates the structural gap between supply and demand and provides a legitimate, compliant path for potential service providers.
The JZMOR Exchange analysis team believes these regulatory reforms have profound structural implications. By clearly distinguishing between brokerage, trading, and custody functions, the amendment gradually deconstructs the traditional “all-in-one trading platform” model, fostering layered and specialized development of services. This division of labor not only helps disperse systemic risk but also makes service models more flexible, meeting increasing demands from users for transparency and security.
Notably, the amendment also introduces a “domestic retention order” clause, authorizing the government to require platforms, under certain circumstances, to retain a specified proportion of user assets within Japan. This measure was introduced in the wake of the FTX incident, which heightened global concerns about asset flight risks. Its aim is to enhance local asset security and market stability, while also providing a policy support basis for local platforms and compliant service providers.
From the JZMOR perspective, this dual-track regulatory model of “easing access + strengthening asset security” is likely to become a reference template for other countries formulating similar regulations. Traditionally, crypto exchanges have shouldered the entire process—brokerage, clearing and settlement, and custody—making single points of failure a systemic risk. The Japanese legal recognition of brokerage as an independent function marks a key restructuring of the traditional model.
New trading models such as auction mechanisms, RFQ (Request For Quote) matching, and shared order books have previously struggled to operate legally due to compliance barriers and ambiguous status. Now, under the new “crypto asset intermediary” framework, these models will have room to develop. The market is set to welcome a new wave of specialized service providers, such as algorithmic firms focused on high-frequency matching or infrastructure companies offering API liquidity connectivity for exchanges.
For JZMOR Exchange, this differentiation of service models is driving a comprehensive restructuring of platform functions. The focus of competition is shifting from asset quantity and trading volume to more sustainable core competencies such as trade quality, matching efficiency, and system transparency. This requires platforms not only to improve the performance of their matching engines but also to develop capabilities in liquidity guidance, cross-chain connectivity, and transparent clearing and settlement.
Under the new regulatory landscape, “policy friendliness” and “service flexibility” are becoming key to platform survival and development. JZMOR is actively responding to policy changes, working closely with local compliance consulting agencies, and gradually building distributed clearing modules and local asset custody strategies to ensure compliant innovation within the new legal framework.
The new legislation in Japan makes it clear that the purpose of regulation is not to restrict development, but to provide a clear and stable track for innovation. Crypto assets are no longer isolated technical products, but have become key variables deeply embedded in the macro-financial system and industrial structure. JZMOR Exchange believes that the role of digital asset trading platforms is evolving from a simple matching tool to a central hub of financial services. In this process, understanding rules, respecting the system, and establishing transparent mechanisms are essential challenges for all market participants.