Japan's Parliament Passes Bill to Regulate Crypto Similar to Stocks

On June 11, 2026, Japan’s House of Representatives passed a crucial bill that reclassifies cryptocurrencies under the Financial Instruments and Exchange Act. This new regulation marks a shift from the previous framework under the Payment Services Act and is aimed at promoting the growth of digital assets to meet rising demand.

The legislation, expected to come into effect in 2027, treats crypto assets like stocks, imposing lower taxes and stricter trading rules. It also allows for the potential introduction of crypto exchange-traded funds (ETFs). The Financial Services Agency (FSA) stated that over 14 million open crypto accounts exist in Japan, largely driven by everyday retail users. Approximately 70% of these accounts belong to individuals earning under 7 million yen (around $43,600) annually.

One of the key features of the new rules includes implementing insider trading bans similar to those in the stock market. Individuals with access to confidential information, such as exchange employees, are prohibited from trading based on undisclosed "material facts." This could involve information regarding the addition or removal of coins on exchanges or significant transactions.

Furthermore, companies must adhere to strict disclosure requirements, necessitating transparency concerning their technology, economic plans, and supply details. Projects that choose not to undergo independent audits must enforce investment caps of 2 million yen on common investors.

To combat fraud and unregistered activities in the crypto space, the legislation implements harsher penalties, increasing the maximum prison sentence for managing an unregistered crypto business from three years to ten years, with corresponding fines up to 10 million yen (around $62,800).

The FSA expressed its commitment to fostering innovation while retaining a focus on user safety. "Our framework intends to improve user protection while remaining mindful of promoting innovation," it stated. The move reflects a growing recognition of cryptocurrencies as mainstream investment assets, not just payment methods.

As Japan solidifies its regulatory framework that aligns cryptocurrencies more closely with traditional financial instruments, observers will watch to see how this impacts local and international investment strategies and whether it spurs innovation within the crypto market.