The Japanese cabinet has endorsed a proposed amendment to classify cryptocurrencies as financial products, signaling a significant change in the country's regulatory approach to the sector. By bringing cryptocurrency assets under the Financial Instruments and Exchange Act, the same framework that governs stocks and other securities, Japan aims to enhance oversight. This shift, reported by Nikkei, could become law as early as 2027 if approved in the current parliamentary session.
Previously, cryptocurrencies were primarily viewed as payment tools under the Payment Services Act, with regulations focusing on custody, anti-money laundering measures, and exchange registration. The proposed rules would not only ban insider trading but also require issuers to publish annual disclosures, increasing transparency. Furthermore, penalties for operating without registration would increase to up to 10 years in prison and 10 million yen in fines, up from the current three years. The Securities and Exchange Surveillance Commission would also see its authority expanded to better monitor the market.
According to Minister for Financial Services Satsuki Katayama, this move is intended to 'broaden the supply of growth capital in line with changes in financial and capital markets, ensuring fairness, transparency, and investor protection.'