Overview
- The lower house approved legislation that would treat cryptocurrencies as financial instruments under the Financial Instruments and Exchange Act and the bill now moves to the upper house for consideration.
- If enacted, the law would create a statutory pathway for crypto exchange-traded funds, a change that the Japan Exchange Group says could allow crypto-linked ETFs to list quickly once detailed rules are in place.
- The proposal cuts the maximum tax on crypto gains to a flat 20% with that tax change scheduled to take effect in 2028 under the draft text.
- Regulators would tighten enforcement and disclosure by aligning insider-trading penalties with securities law, raising the maximum prison term for unregistered sellers, and adding issuer and exchange reporting duties.
- Major banks are advancing stablecoin pilots and expect live transactions in fiscal 2026, with stablecoins to remain regulated under Japan’s payment-services framework rather than as securities; broader rulemaking on custody, investor protection and operations will determine how fast markets and retail investors can use new products.