Legislators emphasized that cryptocurrencies have evolved beyond mere payment tools and necessitate regulations tailored for investment vehicles.
By Olivier Acuna|Edited by Sheldon Reback Jul 15, 2026, 12:05 p.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Japanese lawmakers enacted a significant crypto bill that categorizes digital assets as financial products. (Wiiii/Wikimedia Commons)SummaryShow- Japan has redefined cryptocurrencies as financial instruments, transitioning them from a payment-centric framework to an investment-oriented regime under revised financial and payments legislation set to commence in 2027.
- This new law opens doors for potential spot bitcoin ETFs, enhances penalties for unregistered crypto businesses, and enforces stricter insider-trading, disclosure, and investor protection measures for issuers and exchanges.
- Additionally, lawmakers sanctioned a reduction in the highest tax rate on crypto earnings from as much as 55% to a flat 20%, effective from 2028.
Japan has officially redefined cryptocurrencies as financial instruments, marking a crucial transition that establishes a distinct legal framework for the taxation of crypto assets and the future introduction of crypto exchange-traded funds (ETFs).
The legislation passed by Parliament on Wednesday modifies the Financial Instruments and Exchange Act along with the Payment Services Act (PSA). This change shifts the perception of crypto from being mainly a payment method to being recognized as an investment, akin to other financial assets. The new regulations are anticipated to come into effect in 2027.
This updated framework also eliminates a significant legal barrier for prospective spot bitcoin exchange-traded funds (ETFs), although specific ETF products have not yet been approved. Officials from the Financial Services Agency mentioned that Japan will now explore creating a regulatory structure for crypto ETFs.
The new law increases the maximum prison sentence for operating unregistered crypto businesses from three years to ten years and raises the maximum fine from 3 million yen ($18,500) to 10 million yen. It also introduces more stringent insider-trading regulations and broadens disclosure obligations for crypto issuers and exchanges.
Moreover, the legislative body has greenlighted a plan to reduce the current crypto tax rate from as high as 55% to a uniform 20%, although this new rate will not be implemented until 2028.
This tax reform proposal was introduced late last year with backing from the government and the ruling coalition. The new tax structure allocates 20% between national and local authorities at 15% and 5%, respectively.
The revised crypto regulations will mandate cryptocurrency issuers to provide regular disclosures, while exchanges will be subject to enhanced investor protection and reporting standards.
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Gate Leads Spot Market Share Gains as CEX Volumes Rise for First Time in Five Months
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CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
By CoinDesk ResearchJul 13, 2026CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
Why it matters:
CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B.
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