Japan Plans to Reclassify Cryptocurrencies as Financial Products: Nikkei Report
Japans financial regulators plan to reclassify cryptocurrencies as financial products as early as 2026.
Japanese regulators reportedly plan to amend the countrys laws and reclassify cryptocurrencies as financial products.
FSA Plans to Revise Financial Instruments and Exchange Act
Japans financial regulator, the Financial Services Agency (FSA), is reportedly planning to submit a bill to revise the Financial Instruments and Exchange Act, which would likely see cryptocurrencies classed as financial products. According to a March 30 report by Nikkei, the revision will put cryptocurrencies under insider trading laws that currently apply to other financial products, including stocks. While cryptocurrencies would fall under the purview of the same act, they would likely be put in a separate category from other securities, such as bonds and stocks. If the reclassification takes effect, cryptocurrencies will be regulated under Japans finance laws, and companies offering cryptocurrencies will have to register with the FSA.
The proposed revision is part of Japans concerted effort to improve its blossoming crypto ecosystem, which has witnessed a rise in fraudulent activities. The plans will reportedly be submitted to parliament as soon as 2026, following a detailed review by experts. As it stands, cryptocurrencies are classified as a means of settlement under the Payment Services Act. Under current laws, cryptocurrencies have been regulated according to their use as a payment tool rather than an investment vehicle.
While cryptocurrencies are regulated under the Payment Services Act, significant regulatory gaps still need to be addressed, including insider trading. As such, the move would prohibit buying and selling cryptocurrencies based on undisclosed information, Reuters explained.
The Nikkei report also explained that regulators will enforce the new rules regardless of whether a crypto company operates in the country. How the proposed laws would be enforced against companies outside Japan remains unclear.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Text source: Crypto Daily™
