TL;DR
- Japan confirms a structural shift by moving digital assets under securities law, redefining how platforms operate and how risks are evaluated.
- The FSA promotes tighter transparency standards for token sales and listings, including audits and standardized disclosures.
- The crypto sector expects broader institutional participation and a rulebook that supports projects with real liquidity.
Japan introduces its most extensive update to crypto oversight in nearly nine years. The change places digital assets under the same legal system that governs securities, marking a new stage for exchanges and issuers.
Crypto Reclassification Signals Structural Change
The Financial Services Agency relies on recent reports from the Financial System Council to justify the overhaul. The documents show that domestic trading volumes have expanded since 2022 and that most users approach crypto as an investment. Deposits at licensed platforms exceed five trillion yen, positioning Japan among the most active regulated markets.
The reform moves crypto from the Payment Services Act to the Financial Instruments and Exchange Act. The new classification introduces standardized disclosures, pre-listing documentation, and mandatory code audits for exchange-based offerings. Initial exchange offerings receive particular attention after their rapid growth across 2024 and 2025.
Authorities also outline insider-trading rules connected to token listings, protocol updates, and major system breaches. Comparable rules already operate in the European Union and South Korea. Even decentralized assets fall within the expanded requirements, with exchanges responsible for neutral and verifiable risk summaries.
Institutional Access Expands Under the New Securities Rule
Financial conglomerates anticipate broader market participation as the transition advances. Banks and insurers cannot run exchanges directly, but their subsidiaries may offer trading under strict supervision. This gives large institutions a clear path into the token market through regulated structures.
The reform progresses alongside related initiatives. The FSA is preparing registration rules for custody providers and outsourced trading systems after the DMM Bitcoin breach exposed operational vulnerabilities. Japan’s three largest banks continue testing a shared framework for yen-linked stablecoins, one of the country’s most coordinated digital-asset pilots. Authorities are also examining whether to expand exchange registration options for banking groups to strengthen infrastructure and support retail participation.
The updated framework imposes tighter obligations on platforms and issuers but delivers regulatory clarity that encourages professional capital and long-term planning. With a flat 20% tax on crypto gains set for 2026, Japan positions itself as a jurisdiction where compliant innovation and institutional liquidity can grow under predictable standards.
