- Japan‘s Financial Services Agency plans to classify cryptocurrencies as financial products under existing law.
- The proposal requires disclosures and insider trading rules for 105 crypto assets traded domestically.
- A move to tax crypto gains at a flat 20% rate, similar to stocks, is included in the overhaul.
- The agency is considering allowing banks to hold cryptocurrencies and operate crypto exchanges.
- The new regulations aim for parliamentary approval in 2026.
Japan’s Financial Services Agency (FSA) is preparing to revise the country’s crypto regulatory system by designating digital currencies as financial products within the Financial Instruments and Exchange Act. The update targets 105 cryptocurrencies traded on Japanese exchanges, including Bitcoin and Ether, according to a report from Asahi Shinmun.
The new rules will require exchanges to provide detailed disclosures for each listed token, such as the presence of an identifiable issuer, the underlying blockchain technology, and the asset’s volatility profile. For the first time, inside information around these cryptocurrencies will be subject to insider trading laws. The regulations are planned to be presented for approval at Japan’s main parliamentary session in 2026.
In addition to regulatory changes, the FSA is proposing a tax reform that would apply a flat capital gains tax rate of 20% to profits from the approved 105 cryptocurrencies. Currently, crypto earnings are taxed as miscellaneous income, with rates up to 55%, which are among the highest globally.
The legislation also intends to prevent individuals or entities with unpublished information, such as upcoming listings or delisting plans, from trading those affected tokens. This is a move to strengthen market fairness in the digital asset sector.
Furthermore, the FSA is examining the possibility of allowing banks to acquire and hold cryptocurrencies like Bitcoin for investment purposes, which is currently restricted due to volatility concerns. The agency is also considering permitting banking groups to register as licensed cryptocurrency exchanges, enabling them to provide trading and custody services directly to customers. These proposals will be discussed in upcoming meetings of the Financial Services Council.
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