Financial Services Agency Requests 13.4 Billion Yen Increase in 2027 Budget, New Office for Cryptocurrency Oversight

Strengthening the Cryptocurrency and AI Framework

The Financial Services Agency (FSA) has announced the outline of its budget and staffing requests for the fiscal year 2027 (Reiwa 9). The total budget amounts to 40.3 billion yen, representing an increase of 13.4 billion yen compared to the previous year's budget. The breakdown includes personnel expenses of 20 billion yen, operational expenses of 15.5 billion yen, and a consolidated amount of 4.8 billion yen for the Digital Agency. The agency states that this budget is necessary to further develop initiatives for becoming an "asset management nation" and to effectively implement financial administration.

In terms of organization and staffing, the FSA has requested an increase of a total of 32 personnel. After accounting for a reduction of 18 positions due to organizational rationalization, the net increase request stands at 14 personnel. To address challenges in financial administration, the agency plans to allocate 13 personnel for "strengthening the framework to respond to new financial services" and 19 personnel for "further enhancing financial functions and ensuring trust in the financial system."

New Office for Cryptocurrency and AI Response

Among the 13 personnel for strengthening the framework, the FSA has requested the establishment of an office aimed at enhancing the monitoring system for cryptocurrency exchange operators. Additionally, it includes the establishment of planning officers to address risks associated with new technological advancements such as frontier AI, the establishment of an office to promote the advancement of payment systems utilizing digital technology, and strengthening the supervisory framework for electronic payment service providers.

To promote growth investments that realize a "strong economy," 4.8 billion yen has been allocated. The agency lists a wide range of measures, including promoting reforms in the asset management industry, transforming financial services using digital technologies, including on-chain financial methods, improving the investment environment for private equity funds, and promoting sustainable finance.

Ensuring Trust in the Financial System with 6.4 Billion Yen

For "ensuring trust in the financial system and protecting users," 6.4 billion yen has been allocated. As part of strengthening the response to AI threats, the FSA will advance cybersecurity measures for financial institutions and support the transition to post-quantum cryptography (PQC). It also includes the establishment of a market monitoring infrastructure utilizing AI, as well as support for legal fees for debt restructuring for disaster victims during natural disasters.

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