The Japanese government has greenlit a legislative amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant regulatory shift. This proposed law would bring digital currencies under the purview of the Financial Instruments and Exchange Act, the same framework that governs stocks and other securities, as reported by Nikkei. If approved during the current legislative session, the new law could be enacted as early as the 2027 fiscal year.
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 would outlaw insider trading and necessitate annual disclosure reports from issuers.
Furthermore, 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 also see its regulatory powers expanded. According to Minister for Financial Services Satsuki Katayama, this move is designed to 'broaden the availability of growth capital in response to evolving financial and capital markets, ensuring fairness, transparency, and investor protection.'