The Japanese government has approved a proposed amendment to categorize cryptocurrencies as financial products, marking a significant regulatory shift. By bringing crypto assets under the Financial Instruments and Exchange Act, similar to stocks and other securities, the country aims to enhance oversight. If enacted during the current parliamentary session, the legislation could be implemented as early as fiscal 2027. Previously, Japan primarily viewed cryptocurrency as a payment method under the Payment Services Act, focusing on custody, anti-money laundering, and exchange registration.
The revised rules would prohibit insider trading, require issuers to disclose information annually, and significantly increase penalties for unregistered operations to up to 10 years in prison and 10 million yen in fines. The Securities and Exchange Surveillance Commission would also gain expanded authority to monitor the market. According to Minister for Financial Services Satsuki Katayama, this move aims to 'increase the supply of growth capital in response to changes in financial and capital markets, ensuring market fairness, transparency, and investor protection.'