The Japanese government has endorsed a legislative amendment that seeks to categorize cryptocurrencies alongside traditional financial products, signaling a significant adjustment in the nation's approach to cryptocurrency regulation. By bringing crypto assets under the purview of the Financial Instruments and Exchange Act, the same regulatory framework that governs stocks and securities, Japan is poised to align its crypto regulations more closely with those of other financial instruments.
This shift, reported by Nikkei, could become law as early as the 2027 fiscal year if approved during the current parliamentary session. Previously, cryptocurrencies were primarily viewed through the lens of the Payment Services Act, focusing on aspects such as custody, anti-money laundering, and exchange registration.
The proposed legislation introduces stricter measures, including the prohibition of insider trading and the requirement for issuers to publish annual disclosures, thereby enhancing transparency and regulatory oversight. Additionally, the penalties for operating without proper registration will increase, with potential prison sentences of up to 10 years and fines of up to 10 million yen. This move is intended to bolster the Securities and Exchange Surveillance Commission's authority to monitor and regulate the market effectively.
According to Minister for Financial Services Satsuki Katayama, this regulatory adjustment aims to 'expand the supply of growth capital in response to changes in the financial and capital markets, ensuring market fairness, transparency, and the protection of investors.'