The Japanese Council of Ministers approved the bill that classifies cryptocurrencies as financial products. This development indicates that the legal framework for the cryptocurrency sector in the country may change significantly.
Scope and new regulation details
The bill aims to bring cryptocurrencies under the Financial Instruments and Exchange Act, which applies to stocks and other securities. This legal framework is currently used in products traded on the Tokyo Stock Exchange and other financial markets.
If the amendment is passed by parliament, the new rules are expected to come into force in the 2027 financial year. This process may result in increased supervision and supervision of the cryptocurrency market.
With the proposed changes, criminal sanctions against companies or individuals operating without registration will be significantly aggravated. The prison sentence, which is three years under the current law, will be increased to ten years, and the fine will be increased to 10 million yen.
Market surveillance and investor protection
The powers of the Securities and Exchange Supervision Commission, which is responsible for the supervision of financial markets in Japan, are being expanded. The Commission will be able to exercise more effective oversight of the overall functioning of the cryptocurrency market.
Minister of Financial Services Satsuki Katayama stated in her press release about the regulation that the regulation may offer new opportunities in terms of providing growth capital against developments and changes in capital markets. Katayama also stated that the aim is to ensure transparency and fair competition in the market, as well as to protect investors.
Japan is among the leading countries globally in regulations regarding cryptocurrencies. The rules implemented so far have been designed to highlight the establishment of various standards in the sector and the protection of investor rights.
While the scope of regulation will expand with the proposed new law, the compliance obligations of market actors will also increase. Cryptocurrency companies may need to reposition according to local legislation.
Whether the regulation will be passed by the parliament, the final form of the draft law and its effective date are among the topics that will be closely followed by the public in the country.
