The Japanese government has endorsed a legislative amendment aimed at categorizing cryptocurrencies as financial products, signaling a significant change in the nation's regulatory approach to the cryptocurrency sector. By bringing crypto assets under the purview of the Financial Instruments and Exchange Act, the same framework governing stocks and other securities, the proposal aligns cryptocurrency regulation more closely with that of traditional financial instruments. According to reports, if this legislation is passed during the current parliamentary session, it could come into effect as early as the fiscal year 2027.
Previously, cryptocurrencies in Japan were primarily viewed as payment tools under the Payment Services Act, with a focus on aspects such as custody, anti-money laundering measures, and exchange registration. The new rules would not only prohibit insider trading but also require issuers to disclose information annually.
Additionally, penalties for operating without proper registration would increase substantially, with potential prison sentences of up to 10 years and fines of up to 10 million yen. The Securities and Exchange Surveillance Commission would be granted broader powers to monitor and regulate the market. In a statement, the Minister for Financial Services, Satsuki Katayama, emphasized that these changes are designed to enhance market fairness, transparency, and investor protection, while also responding to the evolving financial and capital markets by expanding access to growth capital.