The Japanese government has greenlit a proposed amendment that aims to categorize cryptocurrencies as financial products, signaling a significant regulatory shift. By bringing crypto assets under the purview of the Financial Instruments and Exchange Act, similar to stocks and securities, the country is poised to enhance oversight.
If ratified during the current legislative session, the new law could come into effect as early as 2027. Previously, cryptocurrencies were primarily viewed as payment methods under the Payment Services Act, with a focus on secure storage, anti-money laundering measures, and exchange registration. The revamped regulations would outlaw insider trading and necessitate issuers to disclose financial information annually.
Penalties for non-compliance would increase, with unregistered operations potentially resulting in decade-long prison sentences and fines of up to 10 million yen. The Securities and Exchange Surveillance Commission would also be granted expanded powers to monitor the market. According to Minister for Financial Services Satsuki Katayama, this move is intended to broaden access to growth capital in response to evolving financial and capital market landscapes, ensuring fairness, transparency, and investor protection.