The Japanese cabinet has endorsed a proposed amendment to categorize cryptocurrencies as financial products, signaling a significant change in the country's regulatory approach. By placing crypto assets under the Financial Instruments and Exchange Act, the same framework governing stocks and other securities, Japan aims to enhance oversight.
If approved during the current parliamentary session, the new law could be enacted as early as fiscal 2027. Previously, cryptocurrencies were primarily viewed as a means of payment under the Payment Services Act, focusing on aspects such as custody, anti-money laundering, and exchange registration.
The updated rules would introduce a ban on insider trading and require issuers to publish annual reports. Additionally, penalties for operating without registration would increase to a maximum of 10 years in prison and 10 million yen in fines. The Securities and Exchange Surveillance Commission would also receive broader powers to monitor the market. According to Minister for Financial Services Satsuki Katayama, this move is intended to 'increase the availability of growth capital in response to shifts in financial and capital markets, ensuring fairness, transparency, and investor protection.'