Japan’s cabinet approved an amendment bill that would classify cryptocurrencies as financial products, marking a change in the way the country regulates the sector.
The proposal includes crypto assets under the Financial Instruments and Exchange Act, a framework used for stocks and other securities, Nikkei reported. If passed during the current session of parliament, the law could come into force as early as fiscal year 2027.
Until now, Japan has treated cryptocurrencies primarily as a payment tool under the Payment Services Law. That focus focused on custody, anti-money laundering controls and currency registration. The new rules would prohibit insider trading and require issuers to publish annual disclosures.
Sanctions would also increase. Operating without registration could lead to up to 10 years in prison, instead of three, and fines could increase to 10 million yen ($62,800). The Securities and Exchange Oversight Commission would gain broader authority to police the market.
At a news conference, Financial Services Minister Satsuki Katayama said the move “will expand the supply of growth capital in response to changes in the financial and capital markets, ensuring market fairness, transparency and investor protection.”
