Japan is preparing a regulatory shakeup that would shift digital assets into the same legal category as stocks and investment products – a move that reflects how the country believes crypto has matured beyond its payment origins.
Until now, Japanese authorities approached cryptocurrencies mostly as a tool for sending and storing value. That approach placed them under the Payment Services Act, aligning digital assets with electronic money services.
But the latest report from the Financial Services Agency says reality has changed: crypto now operates far more like an investment product than a medium of exchange.
To reflect that shift, regulators want crypto oversight moved beneath the Financial Instruments and Exchange Act — the same framework governing securities markets, disclosures, and investor protections. Officials say a payments-focused legal model no longer matches how the asset class is used or where its risks primarily lie.
Token Listings to Face Heavier Scrutiny
A major feature of the proposed framework concerns token launches hosted by exchanges. Japan wants standardized disclosures for initial exchange offerings, forcing companies to publish detailed information about the teams behind them, explain supply structures, and present third-party code audits. Simply put, crypto issuers would be held to standards closer to public-market listings than lightweight token sales.
This shift also places explicit liability on issuers themselves — removing the anonymity shield often cited by decentralized projects.
The update isn’t just about paperwork. Japan also intends to expand its ability to shut down unregistered platforms, including offshore exchanges and decentralized operators serving Japanese users without authorization. Insider-trading rules specific to crypto markets are also expected, bringing Japan into alignment with oversight trends seen in Europe and South Korea.
Tax Reform and ETF Considerations Shape the Broader Landscape
The legal overhaul arrives as Japanese policymakers debate simplifying crypto taxation. A flat 20% rate on gains is being considered — a move that would make reporting easier and potentially boost domestic participation. At the same time, regulators have taken a cautious stance toward derivatives tied to overseas crypto ETFs, signalling that market access will grow gradually rather than indiscriminately.
Taken together, Tokyo’s moves show a government preparing for a future where digital assets sit squarely inside mainstream capital markets — but with the same expectations around accountability, disclosure, and safeguards imposed on traditional finance.
