The Japanese government has greenlit a legislative amendment that would categorize cryptocurrencies as financial products, signaling a significant regulatory shift. By bringing crypto assets under the Financial Instruments and Exchange Act, the same framework governing stocks and securities, Japan aims to enhance oversight. According to Nikkei, if approved during the current parliamentary session, the legislation could come into effect by fiscal 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 proposed rules would introduce a ban on insider trading and require issuers to disclose information annually. Additionally, penalties for operating without 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 receive expanded powers to monitor the market. Minister for Financial Services Satsuki Katayama emphasized that this move is designed to 'increase the supply of growth capital in response to changes in financial and capital markets, ensuring market fairness, transparency, and investor protection.'