Japan is moving forward with a regulatory process that could radically change the position of crypto assets in the financial system. According to market analyst Xaif Crypto, the country’s lower house passed the bill that will bring crypto assets under the Financial Instruments and Exchange Act, which is used for stocks and bonds.
New classification for crypto assets
If the bill passes the upper house, leading digital assets such as Bitcoin, Ethereum and XRP will be officially considered financial instruments rather than loosely regulated digital commodities. This change will not only remain at the definition level; It will bring the crypto market closer to the same set of rules as traditional capital markets.
In this context, the rules regarding insider trading are expected to come into force clearly. Trading on non-public information such as stock exchange listings or project announcements will be prohibited. Thus, it is evaluated that a significant part of the regulatory gaps that have been discussed for a long time in the digital asset market can be closed.
The bill, passed by the lower house, aims to bring crypto assets closer to the same legal framework as stocks and bonds, while also clearly prohibiting transactions made with non-public information.
The regulation will also increase transparency obligations. Exchanges and issuers may have to provide more detailed disclosures regarding token structures, risks and operations. This approach could move the crypto market closer to the reporting standards of publicly traded companies.
Remarkable change on the tax side
One of the most striking topics was taxation. In Japan, crypto earnings are still considered various types of income and the tax rate can be as high as 55 percent. The proposed amendment calls for a flat-rate capital gains tax of 20 percent instead.
This change could make the market more attractive to both individual and institutional investors by making digital assets more compatible with traditional investments. The direction taken by Tokyo indicates that crypto assets are being moved from high-risk speculative instruments into a regulated financial category open to institutional participation.
Replacing the current tax structure of up to 55 percent on crypto earnings with a 20 percent capital gains tax is seen as among the steps that could pave the way for corporate interest in the Japanese market.
| Title | The current situation | Proposed status |
|---|---|---|
| legal status | Digital commodity-like framework | financial instrument |
| Tax | up to 55 percent | 20 percent flat rate |
| Market rules | Limited and fragmented | Close to traditional market rules |
Banks and ETF expectations
Increasing regulatory clarity could open new ground for banks, asset managers and companies that have so far remained aloof due to uncertainty. Market expectations are also growing that this framework could accelerate crypto-related ETF approvals and deepen the integration of digital assets into Japan’s broader financial ecosystem.
On the other hand, MUFG, Mizuho and SMBC, among Japan’s largest banking groups, are moving forward on a joint stablecoin project. According to the news, this project is aimed to be put into commercial use in the 2026 fiscal year. MUFG, Mizuho and SMBC are known as major banking groups that stand out in the Japanese financial system.
The bill has not yet become law. The text passed by the lower house will now be moved to the upper house for discussion and vote. However, the step taken has made more visible Japan’s intention to move crypto assets from the edge of the regulatory area and towards the center of the financial system.
