The Japanese government has greenlit a legislative amendment that seeks to categorize cryptocurrencies as financial products, signaling a significant shift in the nation's regulatory approach to the cryptocurrency sector. By bringing crypto assets under the purview of the Financial Instruments and Exchange Act, the same regulatory framework that governs stocks and other securities, the proposal aims to enhance oversight and transparency. As reported by Nikkei, if the amendment is passed during the current parliamentary session, it could come into effect as early as the 2027 fiscal year.
Previously, cryptocurrencies were primarily viewed as payment tools, regulated under the Payment Services Act, with a focus on aspects such as custody, anti-money laundering, and exchange registration. The new rules would prohibit insider trading and require issuers to disclose their financial information annually. Furthermore, penalties for operating without proper registration would increase substantially, with potential prison terms of up to 10 years and fines of up to 10 million yen, significantly higher than the current three-year prison term.
The Securities and Exchange Surveillance Commission would also see its powers expanded to better monitor and regulate the cryptocurrency market. According to Minister for Financial Services Satsuki Katayama, this move is intended to 'increase the availability of capital for growth, ensuring fairness, transparency, and investor protection in response to evolving financial and capital markets.'