Japan Plans to Classify Cryptocurrencies as Financial Products by 2026
Japan is moving to classify cryptocurrencies as financial products, aiming to apply the same insider trading rules as traditional markets. The Financial Services Agency (FSA) plans to submit a bill revising the Financial Instruments and Exchange Act by 2026.
Current regulations treat digital assets as payment tools under the Payment Services Act. The new classification would redefine cryptocurrencies like Bitcoin as investment products, requiring companies soliciting crypto investments to obtain licenses from regulators. This change aims to enhance consumer protections amid rising complaints about crypto scams.
Key points include:
- Extension of insider trading restrictions to cryptocurrencies
- Creation of a more transparent trading environment
- Growing global trend towards regulating crypto insider trading, as urged by the International Organization of Securities Commissions (IOSCO)
- European Union's Markets in Crypto-Assets Regulation (MiCA) explicitly bans crypto insider trading
- Over 7.34 million active crypto accounts reported in Japan as of January 2025
- Japan issued its first stablecoin trading license to SBI VC Trade for Circle’s USDC
- Liberal Democratic Party seeks to reduce crypto capital gains tax from 55% to 20%
- Consideration of lifting the ban on crypto exchange-traded funds (ETFs)