Japan to Reclassify Cryptocurrencies as Financial Products in Regulatory Overhaul

The Financial Services Agency plans to introduce insider trading restrictions and submit a bill by 2026 to align digital assets with traditional financial instruments.

• Japan's Financial Services Agency (FSA) has announced plans to classify cryptocurrencies as financial products under the Financial Instruments and Exchange Act.
• The proposed changes will introduce insider trading restrictions for crypto assets, similar to those applied to stocks and bonds, to enhance market integrity.
• A bill formalizing the regulatory shift is expected to be submitted to Japan's parliament by 2026, following consultations with industry experts.
• The reclassification aims to provide regulatory clarity, foster innovation in the crypto sector, and potentially attract institutional investors by improving tax and safety measures.
• This move reflects Japan's broader strategy to integrate cryptocurrencies into its financial system, leveraging its history of progressive financial policies and technological innovation.

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