The Japanese government has greenlit a legislative amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant regulatory shift. By bringing digital assets under the purview of the Financial Instruments and Exchange Act, the same framework that governs stocks and securities, Japan is poised to overhaul its approach to the crypto sector, as reported by Nikkei. If enacted during the current legislative session, these changes could become effective as early as the 2027 fiscal year.
Previously, cryptocurrencies were primarily viewed as payment methods under the Payment Services Act, with regulations focusing on aspects like custody, anti-money laundering, and exchange registration. The proposed rules would not only outlaw insider trading but also compel issuers to release annual disclosures.
Furthermore, penalties for operating without proper registration would increase, with potential prison sentences of up to 10 years and fines reaching 10 million yen. The Securities and Exchange Surveillance Commission would see its authority expanded to more effectively monitor and regulate the market.
According to Minister for Financial Services Satsuki Katayama, this move is intended to 'broaden the availability of growth capital in response to evolving financial and capital markets, ensuring fairness, transparency, and investor protection.'