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Japan Equates Cryptocurrencies with Securities
Japan has approved a large-scale reform of crypto regulation: Bill No. 57 passed the committee of the lower house of parliament on 10 June 2026, the plenary session on 11 June, and was transferred to the upper house on the same day. The document amends two key laws at once — the Financial Instruments and Exchange Act and the Payment Services Act.
From a Payment Instrument to a Financial Product
The main structural change is that the regulation of cryptoassets is being moved from the Payment Services Act to the Financial Instruments and Exchange Act. At the same time, cryptoassets do not legally become securities; however, the same basic requirements now apply to them: disclosure of information, supervision of market participants, and investor protection. According to explanatory documents from Japan’s Financial Services Agency (FSA), the reform covers three areas: disclosure of information by issuers, supervision of companies engaged in trading, and investor protection.
The introduction of a ban on insider trading deserves particular attention. Before the amendments were adopted, Japan’s current financial instruments law did not contain a direct prohibition on insider transactions involving cryptoassets. The new rules prohibit transactions before the publication of material facts. The penalties for violation are up to 5 years of imprisonment or a fine of up to 5 million yen.
The Tax Burden Will Fall Threefold
The tax aspect of the reform is no less significant. At present, income from cryptoasset transactions in Japan is classified as miscellaneous or business income and is taxed under a progressive scale — with local taxes included, the maximum rate reaches 55.945%. After the reform, so-called “special cryptoassets” will be subject to separate taxation at a fixed rate of 20.315%: 15.315% income tax, including the special surtax, and 5% local tax. In addition, losses may be carried forward for three years — an instrument long familiar to the stock market, but previously unavailable to holders of cryptoassets.
The Path to Crypto ETFs
In its materials, the FSA directly points to the international context: crypto ETFs are already listed abroad, and the inflow of institutional funds into this segment continues to grow. Tax documents also link the reform to the creation of conditions for launching crypto ETFs within the country. Thus, the legislative changes may become the infrastructural basis for the emergence of Japanese Bitcoin and Ethereum ETFs.
The head of QCP Group in Japan, Koichi Kano, described the essence of the changes figuratively in a comment for business publications: according to him, market participants used to play football without knowing the rules — now everyone understands that it is American football, which means that everyone must put on a helmet.
The reform moves cryptoassets in Japan out of the grey zone of payment legislation and into the full regulatory perimeter of the financial market. The reduction of the tax burden from ~56% to ~20%, the ban on insider trading, and the prospect of crypto ETFs create fundamentally different conditions — both for retail investors and for institutional market participants.
See also: "Japan’s Three Largest Banks Plan to Launch a Joint Stablecoin by 2027"
