Overview
- Japan's Cabinet, which approved the draft on Friday, moved to classify cryptocurrencies as financial products under the Financial Instruments and Exchange Act.
- The bill would ban insider trading in crypto, require annual disclosures from issuers, and raise penalties for unregistered operators to up to 10 years in prison and ¥10 million in fines.
- Tax changes reported with the package propose a flat 20% rate on gains for 105 Financial Services Agency–approved tokens traded on licensed domestic exchanges, while other crypto income would remain taxed as miscellaneous income at rates that can reach about 55%, with the rules targeted for fiscal 2027 if the Diet approves.
- Plans reported by industry and local media point to regulated crypto ETFs by around 2028 and potential bank and insurer custody of digital assets, with firms such as Nomura and SBI preparing related products.
- Oversight would shift from the Payment Services Act to securities regulators under the FIEA, a move officials say is meant to expand growth capital and tighten policing of a market with millions of accounts and persistent fraud complaints.