Tax Filings Were Blocking the Public Chain: Japan's FSA Seeks Reporting Relief for Trust-Type Stablecoins

Two Filings, Not One

Reading the published document, the request covers two documents rather than one. The FSA asks that both the beneficiary-by-beneficiary report under the Inheritance Tax Act and the trust calculation statement under the Income Tax Act be made unnecessary when a beneficiary changes. The reasoning is straightforward: in a scheme where an instrument whose value tracks fiat currency circulates among an indefinite number of users and is used in frequent, high-volume transactions, the trustee cannot ascertain beneficiaries' names or track changes among them. The FSA adds a second ground — that beneficiaries are not expected to derive income from holding the stablecoin. In practice, JPYSC, issued by SBI Shinsei Trust Bank, invests trust assets in bank deposits and Japanese government bonds, but pays holders neither interest nor income distributions. If no income arises, there is little purpose in requiring a statement to report it.

What the ¥500,000 Threshold Implies

Exemptions already exist. Under the proviso to Article 59(3) of the Inheritance Tax Act and Article 30(7)(i) of its enforcement regulations, no beneficiary report is required where the value of trust assets assessed per beneficiary is ¥500,000 (roughly $3,200) or less. The trust calculation statement is likewise unnecessary where annual trust income totals ¥30,000 or less. Small amounts are already covered. The problem is that this ¥500,000 level runs exactly counter to the purpose of trust-type stablecoins. Their principal advantage over the funds-transfer type is freedom from the ¥1 million per-transaction remittance cap, which makes them suited to large-value settlement. Yet transactions above that cap will invariably exceed the ¥500,000 exemption line, triggering a filing obligation with every transfer. By design, the administrative burden concentrates precisely where the trust type's strength lies. That the FSA sought blanket relief rather than a higher threshold reads as a judgment informed by this structure.

Why JPYSC Stays Inside the Account System

The practical weight of the issue becomes clear from JPYSC's current state. SBI Holdings, SBI Shinsei Bank, SBI Shinsei Trust Bank, SBI VC Trade and Singapore's Startale Group began issuing JPYSC on June 24, 2026 as Japan's first trust-type yen stablecoin, with SBI Shinsei Trust Bank as trustee and SBI VC Trade as settlor and initial beneficiary. Roughly ¥3.8 billion was issued on the first day, and as of 19:00 on June 30 the issued value of the specified trust beneficiary rights stood at ¥10,008,294,794, approximately $64 million. Against the funds-transfer-type JPYC's reported cumulative issuance of around ¥3 billion, the launch pace stands out. Distribution, however, remains confined to accounts at SBI VC Trade, with the announcement stating that circulation on public chains will follow once relevant laws and tax practice are settled. Within a closed account system the operator can identify holders. Release the token onto a public chain and holder tracking becomes impossible, so preparing the filings ceases to be physically feasible. The request aims squarely at removing this gate.

What "Only One Item" Signals

The requests are organized under three headings: promoting an asset management nation, supporting child-rearing households, and promoting financial innovation. Of five headline items, only this one on specified trust beneficiary rights falls under financial innovation. Unglamorous, but a defensible ordering of priorities. Among the other requested items are measures accompanying the designation of certain foreign-issued trust-type stablecoins as electronic payment instruments, measures accompanying the entry into force of the amended Financial Instruments and Exchange Act, and measures accompanying revisions to the financial system. Together these show domestic treatment of foreign-issued stablecoins and the tax groundwork for migrating crypto assets into the FIEA proceeding in parallel. The government and ruling parties will deliberate toward the year-end tax reform outline. With MUFG Bank, Sumitomo Mitsui Banking Corporation and Mizuho Bank reported to be weighing a joint issuance during fiscal 2026, the outcome is a design premise for them as well.

Business Development Insights

1. The real milestone for a yen stablecoin business is not whether issuance is permitted but when the filing exemption takes effect. JPYSC has already issued at the ¥10 billion scale, yet while it stays inside an account system it differs little in economic substance from internal book transfers. Only once free circulation on public chains becomes possible does the trust type's intrinsic value — connection to third-party wallets, DeFi and RWA settlement — emerge. Business plans should be anchored not on the issuance date but on whether this item is accepted in the year-end tax reform outline and, if so, when it takes effect. Should it be deferred, product design must assume prolonged closed-loop operation.
2. Regulatory friction is greatest in exactly the large-value segment. The current ¥500,000 exemption line collides head-on with corporate settlement and high-value purchases such as real estate and vehicles, which are the trust type's core market. This carries two implications for prospective entrants. First, the division of labor — small, high-frequency retail payments to the funds-transfer type, large, low-frequency corporate payments to the trust type — is shaped not by technology but by a tax-administration threshold. Second, because relief would widen the trust type's addressable scope at a stroke, there is real value in locking down partnerships and settlement flows in advance.
3. Note that a "yield-free design" is doing work as a regulatory argument. One of the FSA's grounds for relief is that beneficiaries are not expected to derive income from holding. JPYSC's design, paying neither interest nor distributions, functions as the fact that supports it. Conversely, the moment a design attaches yield to holders, that ground weakens and exposure to falling outside the exemption arises. Where Japanese operators wish to attach yield to a stablecoin, providing it as a service outside the issuer — as SBI VC Trade does with JPYSC lending — is the consistent choice from a regulatory standpoint.

Sources

CoinPost, "FSA requests filing exemption for trust-type stablecoins in FY2027 tax reform," August 31, 2026 https://coinpost.jp/?p=734402 Financial Services Agency, "On the FSA's FY2027 Tax Reform Requests," August 31, 2026 https://www.fsa.go.jp/news/r8/sonota/20260831.html Financial Services Agency, "FY2027 Tax Reform Request Items" (PDF) https://www.fsa.go.jp/news/r8/sonota/fsa_trps_r9.pdf SBI Shinsei Trust Bank, "Stablecoin (JPYSC)" https://www.shinseitrust.com/stablecoin/jpysc.html Payment Navi, "Japan's first trust-type yen stablecoin JPYSC to be offered," June 25, 2026 https://paymentnavi.com/paymentnews/176231.html SBI VC Trade, "What is JPYSC: Japan's first trust-type yen stablecoin — mechanism, differences from JPYC, and outlook" https://www.sbivc.co.jp/columns/content/baqz_7m452z Anderson Mori & Tomotsune, "On the Draft Cabinet Orders and Cabinet Office Ordinances Concerning the Stablecoin Legal Framework (Part 1)," February 8, 2023 https://www.amt-law.com/asset/pdf/bulletins2_pdf/230208.pdf Segou Partners Law Office, commentary on the proviso to Inheritance Tax Act Article 59(3) and Enforcement Regulation Article 30(7) https://shintaku.segou-partners.com/column/ So & Sato Law Offices, "Stablecoins and Tokenized Deposits: Legal Character, Insolvency Protection, Lending" https://innovationlaw.jp/stablecoin-tokenized-deposit-lending/ EY Japan, "Overview and Key Points of Laws and Regulations Related to Stablecoins" https://www.ey.com/ja_jp/insights/financial-services/outline-and-points-of-laws-and-regulations-related-to-stablecoins Nikkei, "Path opens for large-value stablecoin settlement: FSA to seek transactions above ¥1 million," August 2026 https://www.nikkei.com/article/DGXZQOUB214100R20C26A8000000/