Japan's Cabinet has officially reclassified cryptocurrency as a financial instrument, aligning it with traditional securities. This significant shift, effective immediately, includes the enforcement of insider trading bans and mandates annual disclosure requirements for cryptocurrency issuers.
The amendment to the Financial Instruments and Exchange Act moves crypto assets out of the experimental payments category and places them within the same regulatory framework as the stock market. This change reflects the growing institutional investment in digital assets.
Finance Minister Satsuki Katayama stated the move aims to "expand the supply of growth capital... and ensure market fairness, transparency, and investor protection." Penalties for unregistered crypto exchanges have also been increased.
Japan previously regulated crypto assets under the Payment and Settlement Act. This new classification signifies a major step toward integrating crypto into traditional finance, with plans to legalize crypto exchange-traded funds (ETFs) by 2028.