The Japanese government has greenlit a legislative amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant regulatory shift. By bringing digital assets under the purview of the Financial Instruments and Exchange Act, the same framework governing stocks and securities, the proposal seeks to bolster oversight. If enacted during the current parliamentary session, the legislation could come into effect as early as the 2027 fiscal year. Previously, Japan regulated cryptocurrencies primarily as a means of payment under the Payment Services Act, focusing on aspects like custody and anti-money laundering.
The revised rules would outlaw insider trading and compel issuers to release yearly disclosure reports. Penalties for operating unregistered would increase substantially, with potential prison sentences of up to 10 years and fines reaching 10 million yen. The Securities and Exchange Surveillance Commission would see its regulatory powers expanded.
According to Minister for Financial Services Satsuki Katayama, this move is designed to increase the availability of growth capital, ensuring fairness, transparency, and investor protection in the evolving financial landscape.