Japan's cabinet has greenlit a proposed amendment that aims to categorize cryptocurrencies as financial products, signaling a significant shift in the nation's regulatory approach to the sector. The proposed legislation would bring cryptocurrency assets under the purview of the Financial Instruments and Exchange Act, the same framework that governs stocks and other securities, as reported by Nikkei. If this proposal is passed during the current parliamentary session, it could come into effect as early as the fiscal year 2027. Up until now, Japan has primarily viewed cryptocurrency through the lens of the Payment Services Act, focusing on aspects such as custody, anti-money laundering measures, and exchange registration.
The new rules would not only ban insider trading but also require issuers to publish annual disclosure reports. Additionally, penalties for operating without proper registration would increase significantly, with potential prison sentences of up to 10 years and fines of up to 10 million yen. The Securities and Exchange Surveillance Commission would also see its authority expanded to more effectively monitor the market.
According to Minister for Financial Services Satsuki Katayama, this move is intended to 'broaden the availability of capital for growth in response to evolving financial and capital markets, ensuring fairness, transparency, and investor protection within the market.'