Japan's parliament is on the brink of approving a far-reaching legislative measure that will regulate cryptocurrencies akin to stocks and other financial assets.

The new regulations are slated to come into effect in 2027, with a focus on promoting innovation and enhancing the growth of the crypto market to satisfy both domestic and international demand for digital asset services.

By Olivier Acuna|Edited by Jamie Crawley Jun 11, 2026, 10:32 a.m. 2 min read

The Japanese Lower House has passed a significant bill that categorizes cryptocurrencies as stocks due to growing global interest in digital assets. (Kimtaro/Wikimedia Commons)

Key Points:

  • The lower house of Japan's parliament has passed a bill to regulate cryptocurrencies under the Financial Instruments and Exchange Act, which will classify them similarly to stocks and other investment vehicles.
  • This new legislation is expected to take effect next year and will categorize crypto assets as financial instruments, resulting in reduced taxes, stricter trading regulations, and the potential introduction of crypto exchange-traded funds (ETFs).
  • The bill includes provisions against insider trading, heightened disclosure obligations, investment limits for unaudited token offerings, and significantly increased penalties for operating unregistered crypto enterprises.

Japan is poised to redefine its approach to cryptocurrencies, transitioning from viewing them solely as a means of payment to recognizing them as legitimate financial investments.

The recent passage of the bill in the House of Representatives shifts the regulatory framework governing cryptocurrencies from the Payment Services Act to the Financial Instruments and Exchange Act.

The Financial Services Agency (FSA) noted that this shift comes as cryptocurrencies increasingly become mainstream investment assets, with over 14 million active crypto accounts in Japan. Notably, approximately 70% of these accounts are held by retail users earning less than 7 million yen ($43,600) annually.

Once implemented, the new regulations will classify crypto assets as financial instruments, leading to lower taxes and stricter trading standards. This change also paves the way for the introduction of crypto ETFs, which the ruling Liberal Democratic Party has described as offering investors straightforward investment options.

The FSA emphasized that the regulatory framework aims to enhance user protection while fostering innovation, as crypto assets gain traction as investment opportunities for both local and international investors.

The FSA will enforce an insider trading prohibition for cryptocurrencies that mirrors the regulations in the stock market. Insiders or exchange personnel will be prohibited from trading tokens based on undisclosed "material facts," such as plans to add or remove a coin, impending business closures, or significant trades.

The legislation establishes stringent disclosure requirements to prevent developers from misleading the public. Projects are mandated to provide transparent information about their technology, supply, and financials. If a company raises funds via a token without an independent audit, investors will face a strict cap of 2 million yen.

The government is also cracking down on fraudulent activities, increasing the maximum prison term for operating an unregistered crypto business from three years to ten years. The securities regulator will gain explicit authority to conduct criminal investigations and request courts to freeze assets. Operating without proper registration could lead to a decade-long prison sentence and fines up to 10 million yen ($62,800).

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