Japan’s financial regulator is reportedly considering allowing members of banking groups to offer cryptocurrency trading services, in a bid to broaden market access and encourage competition, the Nikkei reported.

The Financial Services Agency (FSA) is also said to be weighing the removal of a ban that currently prevents banks from purchasing and holding cryptocurrencies as investment assets.

Under Japan’s Banking Act, subsidiaries of banking groups are not presently permitted to register with the regulator to provide crypto asset services.

According to the Nikkei, the FSA plans to revise existing rules to enable securities subsidiaries within banking groups to offer such services, placing them on equal footing with securities company affiliates.

The country’s crypto market is currently dominated by securities-linked entities such as Rakuten Wallet, affiliated with Rakuten Securities, and a unit of SBI Holdings.

Given the high volatility of digital assets and the potential for significant losses, the FSA will reportedly require bank-affiliated securities firms to provide clear risk disclosures to retail investors, the report added.

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