The Financial Services Agency of Japan plans to establish new regulations requiring encryption exchanges to set up a liability reserve.

PANews, November 25, reported by Cryptobriefing citing Nikkei News, that the Japanese Financial Services Agency will require encryption exchanges to establish a liability reserve to protect customers from potential security vulnerabilities and operational risks. As the country's main financial regulatory body, the Japanese Financial Services Agency is implementing this reserve requirement with the aim of bringing Virtual Money into a regulatory framework closer to that of traditional securities and promoting a safer market participation environment. The new regulations focus on ensuring that exchanges have the ability to cover operational risks and safeguard customer funds. With the adjustment of regulatory policies, Japanese asset management institutions are actively exploring new types of encryption investment products. These changes are expected to expand trading services in the digital asset sector and stimulate market competition.