The Japanese government officially included crypto assets in the category of financial instruments with its amendment to the Financial Instruments and Exchange Act. This regulation shows that the crypto market will no longer be treated just as a means of payment, but as a broader part of the financial system. With the new framework, significant changes are foreseen in the market structure and control mechanisms.
New classification and regulatory scope
The amendment also includes provisions prohibiting transactions with information that has not been disclosed to the public, known as insider trading. This step aims to preserve market integrity, especially with the increasing interest of institutional investors. The inclusion of crypto assets in a similar regulatory framework as stocks indicates that the market will be governed by stricter rules.
Under the new regulation, structures that issue crypto assets will be required to submit a transparency report at least once a year. This obligation aims to provide investors with access to more accurate information. It is also noteworthy that fines and sanctions against stock exchanges operating unregistered have been increased.
The Japan Financial Services Agency had previously evaluated crypto assets under the Payment and Settlement Act. However, the growth of the market and the increase in corporate capital made it necessary to update this approach. With the new regulation, crypto assets have now been removed from the experimental payment instruments category.
This change is seen as the beginning of an era in which the crypto market will be more integrated with the traditional financial system. In particular, topics such as investor protection and market transparency come to the fore. In this context, regulatory institutions are expected to increase their inspection capacity.
ETF plans and institutional interest
Japanese Finance Minister Satsuki Katayama, in her statement after the cabinet meeting, emphasized that adaptation to changes in financial markets will be made and protecting investors will be a priority.
“By responding to changes in the financial and capital markets, we will expand the supply of growth capital and ensure market fairness, transparency and investor protection.”
The government plans to take additional steps to bring crypto assets closer together with traditional finance. In this context, the legalization of crypto exchange traded funds by 2028 is on the agenda. Such a step could make it easier for the market to reach a wider investor base.
It is stated that major financial institutions such as Nomura Holdings and SBI Holdings are preparing to develop crypto-related investment products. These companies are among Japan’s well-established financial institutions and play an active role in global markets. The involvement of institutional actors in the process can accelerate the maturation process of the market.
It is also known that the government has previously supported reducing the high tax rate applied to crypto earnings. The single-rate 20 percent tax plan is considered as an element that could increase investor interest. All these developments show that Japan is moving towards incorporating crypto assets into a more comprehensive financial framework.
