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The Japanese government amended the Financial Instruments and Exchange Act on Friday to classify crypto assets as financial instruments.
The amendment also bans <a href="https://cointelegraph.com/news/cftc-enforcement-chief-warns-insider-traders-on-prediction-markets-will-be-prosecuted" rel="noopener noreferrer nofollow">insider trading</a> and other activities that involve buying and selling based on undisclosed information, Nikkei <a href="https://www.nikkei.com/article/DGXZQOUB101480Q6A410C2000000/" rel="noopener noreferrer nofollow">reported</a>.
The amended act will also now require cryptocurrency “issuers” to be more transparent and disclose information once a year.
Japan’s Financial Services Agency has previously regulated crypto assets under the Payment and Settlement Act, citing their potential use as a means of payment. However, the regulations and classifications have been updated to reflect increasing institutional investment in the asset class.
By reclassifying crypto as a financial instrument rather than just a payment method, Japan is moving crypto out of the experimental payments category and into the same league as its stock market.
<figure><img alt="Japan, Cryptocurrency Investment" src="https://s3.cointelegraph.com/uploads/2026-04/019d7601-53ea-7d51-8603-61bafb3e3134.jpg">
 <figcaption>Source: Startale Group CEO <a href="https://x.com/WatanabeSota/status/2042472175438078057" rel="noopener noreferrer nofollow">Sota Watanabe</a>
 </figcaption>
</figure>
<h2 id="crypto-under-the-tradfi-umbrella">Crypto under the TradFi umbrella</h2>
“We will expand the supply of growth capital in response to changes in financial and capital markets, and ensure market fairness, transparency, and investor protection,” said Finance Minister Satsuki Katayama at a press conference after the Cabinet meeting.&nbsp;
Fines and sentences for unregistered crypto exchanges have also increased under the amendment.&nbsp;
Related: <a href="https://cointelegraph.com/features/prediction-markets-testing-legal-limits-asia" rel="noopener noreferrer nofollow">Prediction markets are testing legal limits in strict Asian markets</a>
Japan <a href="https://cointelegraph.com/news/japan-crypto-securities-framework-exchange-led-access-2026" rel="noopener noreferrer nofollow">signaled</a> that it was bringing crypto under the same umbrella as traditional finance in January when Katayama said, “To ensure citizens benefit from digital and blockchain-based assets, the role of exchanges and market infrastructure will be essential.”&nbsp;
The government <a href="https://cointelegraph.com/news/japan-gov-backs-flat-tax-crypto-profits" rel="noopener noreferrer nofollow">backed plans</a> in December to significantly reduce Japan’s maximum tax rate on crypto profits, with a flat rate of 20% across the board.&nbsp;&nbsp;
<h2 id="crypto-etfs-coming-to-japan">Crypto ETFs coming to Japan</h2>
Japan is also planning to legalize crypto exchange-traded funds (ETFs) by 2028, marking a major shift toward mainstream crypto adoption, <a href="https://cointelegraph.com/news/japan-considers-crypto-etfs-2028-nikkei" rel="noopener noreferrer nofollow">according</a> to a January report.&nbsp;
Major financial groups, including Nomura Holdings and SBI Holdings, are among the first companies expected to <a href="https://cointelegraph.com/news/sbi-plans-bitcoin-xrp-etf-japan" rel="noopener noreferrer nofollow">develop crypto-linked exchange-traded products</a>.&nbsp;
Asia Express: <a href="https://cointelegraph-magazine.com/taiwan-advised-btc-drift-hack-north-korea-asia-express/" rel="noopener noreferrer nofollow">Phantom Bitcoin checks, China tracks tax on blockchain</a>

Japan approves bill to classify crypto as financial instruments

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