The Japanese government has approved a proposed amendment that classifies cryptocurrencies as financial assets, signaling a significant change in the country's regulatory approach to the industry. By bringing crypto under the Financial Instruments and Exchange Act, the same framework that governs stocks and other securities, the proposed law aims to enhance oversight. If enacted during the current legislative session, the new regulations could be in effect by fiscal year 2027. Previously, Japan regulated crypto primarily as a payment method under the Payment Services Act, focusing on aspects like custody, anti-money laundering, and exchange registration.
The revised rules introduce stricter measures, including the prohibition of insider trading and the requirement for issuers to publish annual reports. Penalties for operating without registration will increase, with potential prison sentences of up to 10 years and fines of up to 10 million yen.
The Securities and Exchange Surveillance Commission will also have expanded powers to monitor the market. According to Minister for Financial Services Satsuki Katayama, these changes are designed to increase the availability of capital for growth, ensuring fairness, transparency, and investor protection in the evolving financial and capital markets.