Japan’s parliament poised to pass sweeping bill to regulate crypto like stocks
The new rules, which are expected to come into effect in 2027, aim to foster innovation and crypto market growth to meet internal and external demand for digital asset services.
What to know:
- Japan’s lower house has passed a bill to regulate cryptocurrencies under the Financial Instruments and Exchange Act, treating them more like stocks and other investment products.
- The new rules, expected to take effect next year, would classify crypto assets as financial instruments, bringing lower taxes, stricter trading rules, and the potential launch of crypto exchange-traded funds.
- The legislation introduces stock-style insider trading bans, tougher disclosure requirements, investment caps for unaudited token offerings, and sharply increased penalties for operating unregistered crypto businesses.
The Financial Services Agency (FSA) attributed the move to crypto quickly becoming a more mainstream investment asset in an announcement of the passage of the bill Thursday. Japan now has more than 14 million open crypto accounts, according to data cited by the FSA. Low- to middle-income everyday retail users are driving this growth, with people earning under 7 million yen ($43,600) a year accounting for roughly 70% of those accounts.
The new rules, expected to take effect next year, would classify crypto assets as financial instruments,subjecting them to lower taxes and stricter trading rules. It also opens the door to new products like exchange-traded funds (ETFs). “Crypto-ETFs would provide investors with easy-to-understand ways of investment,” the ruling Liberal Democratic Party said recently.
“Our framework intends to improve user protection while remaining mindful of promoting innovation, given that crypto assets are increasingly positioned as investment targets for both domestic and foreign investors,” the FSA said in the statement.
