Japan Plans Major Crypto Reform, Treating Tokens Like Stocks

Japan is preparing to introduce sweeping changes to its cryptocurrency regulatory framework, with the Financial Services Agency (FSA) reportedly set to propose legislation that would classify digital assets as financial products under national law.

According to a report by Nikkei on March 30, the FSA is aiming to revise the Financial Instruments and Exchange Act as early as 2026. The move would bring cryptocurrencies under the same legal umbrella as traditional financial instruments such as stocks—particularly in relation to insider trading laws—though crypto would likely remain in a separate category from securities like equities and bonds.

While details of the proposal are still under discussion, insiders suggest the new rules could significantly tighten oversight of digital asset transactions. Companies offering crypto services would be required to register with the FSA, a step that would formalize regulatory compliance for both domestic and foreign entities. However, questions remain over how these rules might apply to firms operating outside of Japan’s jurisdiction.

Another key uncertainty surrounds the scope of the regulation—specifically, whether the rules would apply uniformly across all digital assets, from well-established cryptocurrencies like Bitcoin and Ethereum to more speculative tokens such as memecoins.

The potential reform is part of a broader trend of pro-crypto momentum in Japan. Earlier this year, SBI VC Trade, a subsidiary of financial giant SBI Holdings, became the first firm licensed to handle stablecoins in Japan. The company has since announced plans to support Circle’s USDC, following the stablecoin’s approval for use in the country.

Japan’s ruling Liberal Democratic Party has also taken steps to encourage digital asset adoption, including a proposal to reduce the capital gains tax on crypto from 55% to 20%, and to formally recognize digital assets as a distinct asset class.

In a further signal of regulatory openness, local media reported in February that the FSA is considering lifting its ban on crypto exchange-traded funds (ETFs), in an apparent effort to align with recent developments in markets like Hong Kong, which approved the trading of crypto ETFs earlier this year.

If implemented, these measures could significantly alter the landscape for crypto businesses and investors in Japan, reinforcing the country’s growing role as a key player in the global digital asset economy.