Japan changes the status of cryptocurrencies to financial assets

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• To date, cryptocurrencies in Japan have been regulated under the Payment Services Act (PSA), a regulation enacted after the 2014 Mt. Gox collapse that predominantly treated digital assets as means of payment.

To date, cryptocurrencies in Japan have been regulated under the Payment Services Act (PSA), a regulation enacted after the 2014 Mt. Gox collapse that predominantly treated digital assets as means of payment.

However, with the introduction of a new system under FIEA, proposed by the Financial Services Agency (FSA), things are changing dramatically. Bitcoin, Efirium, XRP and 102 other tokens listed on licensed Japanese exchanges are now legally equivalent to securities such as stocks and bonds.

Such reclassification has far-reaching implications. Finance Minister Satsuki Katayama, who became the country’s first woman to hold the post, emphasized that the purpose of the reform is to “encourage the flow of productive capital, ensure market integrity and transparency, and protect investors.

These are not just declarations, but provisions specific to securities laws.

RESULT: Japan has officially approved a legislative initiative recognizing bitcoin and other cryptocurrencies as financial assets.

The amendments regulate specific enforceable measures, harmonizing crypto markets with traditional securities regulations.

Insider trading on crypto markets is now strictly prohibited: speculation in digital assets using non-public material information carries the same legal consequences as fraud on stock exchanges.

Token issuers are required to annually disclose information on technology, market volatility and management principles, which was not previously required in the Japanese cryptocurrency market.

The exchanges themselves will be renamed from “crypto exchange operators” to “crypto asset trading operators, reflecting their new status as regulated financial intermediaries.

The sanctions have been significantly tightened.

At the same time as amending legislation, Tokyo is pursuing tax reform that could be just as important.

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