- Japan’s FSA plans to classify crypto as financial products by 2026.
- Japan had 7.34 million active crypto trading accounts as of January 2025.
The Financial Services Agency (FSA) of Japan is about to classify crypto assets as financial products. With this action, insider trading will be regulated, and investors will be given more protection. As a Nikkei report states, the FSA will submit these legislative amendments to the parliament by 2026.
The amendments in question are the ones that intend to modify the Financial Instruments and Exchange Act. The division for crypto assets is not going to treat them as securities but give them investment features. Such news can make new rules related to it being susceptible to regulations similar to those of the current financial markets regarding insider trading.
Presently, Japan considers bitcoin and other cryptocurrencies as mere settlement methods and subjects them to the Payment Services Act. But even exchanges as well as all solicitors of crypto investments will be required to register with regulators. FSA would want to apply the rulings to firms providing services to local citizens irrespective of their location beyond Japan.
The perception increased in terms of crypto scams, which has made them tighten. Last month, the FSA called upon Apple and Google to take down five “non-registered” overseas crypto exchanges from their app stores. The implementation of new rules might enact stricter requirements on crypto service providers to contravene fraudulent activities.
Reclassification might also end up affecting taxation; currently, crypto investments can be taxed at rates as high as 55%, while financial instruments such as ETFs are taxed only at rates of 20%. Such a match would lower the crypto tax rates, which could lure more institutional investors.
Japan has been extending its coverage on crypto regulation and at the same time promoting the adoption of it. Recently, lawmakers urged that they create a National Bitcoin Reserve. According to January 2025 records, Japan had about 7.34 million active accounts for cryptocurrency trading.
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