The Japanese government has given its approval to a proposed legislative amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant adjustment in the nation's regulatory approach to the cryptocurrency sector. The proposed legislation would bring cryptocurrency assets under the purview of the Financial Instruments and Exchange Act, the same regulatory framework that governs stocks and other securities, as reported by Nikkei.
If this proposal is passed during the current parliamentary session, it could become effective as early as the fiscal year 2027. Previously, 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 introduce a ban on insider trading and require issuers to publish annual disclosure reports.
Additionally, penalties for operating without proper registration would increase, with potential prison sentences of up to 10 years and fines of up to 10 million yen. The Securities and Exchange Surveillance Commission would be granted broader powers to oversee the market.
During a press conference, the Minister for Financial Services, Satsuki Katayama, stated that this move aims to 'increase the availability of capital for growth in response to the evolving financial and capital markets, ensuring fairness, transparency, and the protection of investors.'