The Japanese government has endorsed a proposed amendment to categorize cryptocurrencies as financial products, signaling a significant shift in the nation's regulatory approach. By bringing crypto assets under the Financial Instruments and Exchange Act, the same framework that governs stocks and other securities, the country aims to enhance oversight. This move, reported by Nikkei, could come into effect as early as fiscal 2027 if approved in the current parliamentary session. Previously, cryptocurrencies were primarily viewed as payment tools under the Payment Services Act, with a focus on custody, anti-money laundering, and exchange registration.
The revised rules will prohibit insider trading and require issuers to disclose information annually. Penalties for operating without registration will increase, with potential imprisonment of up to 10 years and fines of up to 10 million yen. The Securities and Exchange Surveillance Commission will also be granted broader powers to monitor the market. According to Minister for Financial Services Satsuki Katayama, this change aims to increase the availability of growth capital, ensure market fairness and transparency, and protect investors in response to evolving financial and capital markets.