Japan to Integrate Crypto Trading into Regulated Exchange Systems

Japan's Finance Minister, Satsuki Katayama, announced the government's support for integrating crypto trading into regulated stock and commodity exchanges. This initiative aims to incorporate digital assets within the existing market frameworks by 2026, termed as Japan's "digital year."

The government plans to align digital asset trading with established regulatory structures, ensuring enhanced oversight and investor protection.
Traditional exchanges are viewed as more trustworthy by retail investors compared to standalone crypto platforms, facilitating easier oversight and reduced risk.
Japan is closely monitoring international markets where crypto-linked products already trade on major exchanges.
Proposals have been made to shift crypto oversight from the Payment Services Act to the Financial Instruments and Exchange Act for stricter regulation, similar to that of stocks and funds.
Regulatory focus is on investment-driven crypto activity rather than payment-based usage, with enforcement measures tightening, such as blocking unregistered overseas exchange apps.
Tax reforms are underway to reduce crypto gains tax from a progressive rate up to 55% to a flat 20%, aligning it with rates for stocks and funds.
Stablecoins are included in these plans, with approvals for the yen-backed JPYC stablecoin and bank involvement in crypto custody and trading.