The Japanese government has approved a proposed amendment that classifies cryptocurrencies as financial products, signaling a significant change in the country's regulatory approach. By bringing crypto assets under the Financial Instruments and Exchange Act, the same framework used for stocks and securities, the new rules would require stricter oversight. If the law is passed during the current parliamentary session, it could come into effect as early as 2027.
Previously, cryptocurrencies were primarily treated as payment tools under the Payment Services Act, focusing on aspects such as custody and anti-money laundering checks. The updated regulations would introduce a ban on insider trading, obligate issuers to publish annual reports, and increase penalties for non-compliance, including higher fines and longer prison sentences.
The move is intended to enhance market transparency, fairness, and investor protection, according to the Minister for Financial Services.