The Japanese government has greenlit a bill that would categorize cryptocurrencies under the same regulatory framework as traditional financial instruments, marking a significant policy shift in the country's approach to digital assets. This move would bring cryptocurrencies under the purview of the Financial Instruments and Exchange Act, similar to stocks and other securities, as reported by Nikkei. If the bill is passed during the current legislative session, it could become law as early as 2027.
Previously, cryptocurrencies were primarily viewed as payment methods, governed by the Payment Services Act, with a focus on secure storage, anti-money laundering measures, and exchange registration. The proposed legislation would outlaw insider trading and mandate that issuers release annual financial reports. 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, a significant increase from the current three-year sentence.
The Securities and Exchange Surveillance Commission would also see its powers expanded to better monitor and regulate the market. According to Minister for Financial Services Satsuki Katayama, this change aims to enhance market fairness, transparency, and investor protection by adapting to the evolving financial landscape.