Financial Services Agency and European Commission Exchange Views on Stablecoins and Tokenization at 7th Japan-EU Joint Financial Regulatory Forum, Sharing MiCA Implementation Status

Key Points of This Article

• The European Commission reported on the implementation status of MiCA and the main points of the public consultation.
• The use of AI and cyber resilience were also discussed, with the next meeting scheduled for 2027.

Discussion on Crypto Assets at Japan-EU Regulatory Forum

On the 6th, the Financial Services Agency (FSA) announced a joint statement from the 7th Japan-EU Joint Financial Regulatory Forum held in Tokyo on the 4th and 5th with the European Commission. In the field of digital finance, discussions were held on the progress of crypto assets, stablecoins, and tokenization.

The meeting was co-chaired by Yu Okazaki, International Coordinator of the FSA, and Alexandra Jules-Schreder, Deputy Director-General of the European Commission's Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA). Five executives from EU institutions, including the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA), also participated.

European Commission Reports on MiCA Implementation Status

According to the joint statement, the European Commission reported on the implementation status of the EU's regulation on crypto asset markets (MiCA) and the main points from the recently concluded public consultation. The FSA also explained recent trends in digital finance. However, the statement did not disclose specific details presented by both sides.

MiCA is a comprehensive regulation that defines services related to the issuance, exchange, and custody of crypto assets within the EU. Regulations related to stablecoins will take effect on June 30, 2024, while the remaining regulations will come into effect on December 30 of the same year. Operators can provide services throughout the EU once they obtain authorization in one member state.

Domestically, a revised law was enacted on July 15, 2026, to move crypto assets from the Payment Services Act to the framework of the Financial Instruments and Exchange Act (FIEA). This includes measures for insider trading regulations and the establishment of information disclosure, aimed at enhancing investor protection, with enforcement expected in 2027.

AI and Cybersecurity Measures, Next Meeting in 2027

In the field of digital finance, the meeting also addressed the use of AI in financial services and the increasing cyber threats. Participants emphasized the importance of "responsible innovation" to keep the use of AI safe and transparent. They also confirmed the need to enhance cyber resilience in light of changing cyber threats posed by frontier AI. There was agreement to continue regulatory and supervisory cooperation in forums such as the G7, G20, and Financial Stability Board (FSB).

Other topics discussed included sustainable finance, insurance, banking regulation, and capital markets. Participants confirmed that Japan has already fully implemented the final elements of the Basel III capital adequacy regulations. The next meeting is scheduled to be held in Brussels in 2027.