Japan's cabinet has greenlit a draft amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant regulatory shift. By falling under the Financial Instruments and Exchange Act, similar to stocks and securities, crypto assets would be subject to stricter oversight. This proposed law, potentially effective as early as fiscal 2027, would replace the current framework that views crypto primarily as a payment method under the Payment Services Act. Key changes include the prohibition of insider trading, compulsory annual disclosures from issuers, and increased penalties for unregistered operations, now punishable by up to 10 years in prison and fines of 10 million yen.
The Securities and Exchange Surveillance Commission would also see its authority expanded to better monitor the market, with Minister for Financial Services Satsuki Katayama emphasizing the move's goal of ensuring market fairness, transparency, and investor protection amidst evolving financial landscapes.