Japan FSA seeks exemption for trust-based stablecoins

Japan’s Financial Services Agency submitted a fiscal 2027 tax reform request on Aug. 31, 2026 asking the government to exempt trust-based stablecoins from an inheritance-tax filing requirement that applies whenever a trust beneficiary changes.

Under current inheritance tax law, a trustee must file trust-related documents with tax authorities each time a beneficiary changes. For stablecoins structured as specified trust beneficiary rights, the beneficiary changes with every token transfer, which would trigger a filing obligation on each transaction.

The FSA argued the filing duty is technically and operationally unworkable at retail scale. Trustees cannot reliably match anonymous blockchain addresses to named holders, and they cannot track the volume and speed of transfers that occur on public blockchains. The agency requested a blanket exemption for beneficiary changes involving trust-based stablecoins rather than a simplified filing process or a volume threshold.

The exemption request was included in a section on promoting financial innovation in the FSA’s tax proposals. The agency left more detailed tax questions for foreign-issued trust tokens on a separate track.

Japan’s Payment Services Act permits three issuer models for stablecoins: licensed banks, trust companies and registered fund transfer service providers. In the trust model, reserve assets are placed with a trust bank and token holders receive beneficiary rights that give a claim on segregated trust assets. SBI’s JPYSC is an example of a domestic trust-based yen stablecoin.

Trust-based tokens benefit from asset segregation under trust law, but they also fall under reporting rules developed for conventional trusts with identifiable beneficiaries. The FSA noted that those rules assume a stable, known set of beneficiaries, an assumption that does not apply when tokens circulate widely on public ledgers.

A Cabinet Office Ordinance amendment that took effect on June 1, 2026 recognized qualifying foreign trust-type stablecoins as electronic payment instruments. The FSA’s filing request did not include detailed tax changes for overseas trust tokens and left those matters to a separate process.

Tax reform requests are proposals only. The government and the ruling parties will review agency submissions while preparing the annual tax reform outline, which is typically finalized late in the year. The FSA placed the exemption under financial innovation in its filing, and the ruling parties will decide whether to adopt the change.

The agency said that if the filing rule remains unchanged, the trust model will be practical for settlement between known counterparties but impractical for retail circulation and high-volume corporate deployments such as payroll systems that move funds to thousands of recipients.