Key Notes
- Japan plans to classify cryptocurrencies as financial products by 2026.
- If approved, cryptocurrencies will be treated as investment assets, not payment tools.
- The move will bring insider trading rules to the crypto market.
Japan is reportedly working on classifying cryptocurrencies as financial products, bringing the industry under the same insider trading rules that govern traditional financial markets.
According to a recent Nikkei report , the Financial Services Agency (FSA) plans to submit a bill revising the Financial Instruments and Exchange Act to parliament by 2026.
Under the current Payment Services Act, digital assets are treated as payment tools rather than investment vehicles. However, with the growing popularity of crypto trading, regulators are aiming to close the legal gap that leaves the market vulnerable to manipulation.
If approved, cryptocurrencies such as Bitcoin (BTC) will be redefined as investment products rather than settlement instruments.
As a result, companies soliciting crypto investments will need to obtain a license with regulators, not just the exchanges facilitating trades. This could strengthen consumer protections, especially as complaints of crypto-related scams rise.
This reclassification is expected to extend insider trading restrictions to cryptocurrencies, creating a more transparent trading environment.
Global Trend Toward Crypto Insider Trading
Other governments are also working on insider trading regulations in crypto markets. In 2023, the International Organization of Securities Commissions (IOSCO) urged global regulators to apply insider trading rules to the sector, similar to how they oversee stocks and bonds.
It is important to note that the European Union, under its Markets in Crypto-Assets Regulation (MiCA) , explicitly bans insider trading involving cryptocurrencies.
Pro-Crypto Moves in Japan
The FSA’s move comes as crypto adoption in Japan grows, with over 7.34 million active crypto accounts reported as of January 2025.
Japan’s government continues to adopt a pro-crypto approach in recent years. On March 4, the country issued its first stablecoin trading license to SBI VC Trade, allowing the platform to support Circle’s USDC.
The ruling Liberal Democratic Party is pushing for reforms to reduce the crypto capital gains tax from 55% to 20%, while categorizing digital assets as a distinct financial class.
Japan is also considering lifting its ban on crypto exchange-traded funds (ETFs), aligning with Hong Kong’s pro-crypto stance.
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