Japan Moves to Regulate Crypto: New Rules Expected by 2026

Japan is preparing to introduce new regulations that could transform the legal status of cryptocurrencies. According to Nikkei, the Financial Services Agency (FSA) plans to classify cryptocurrencies as financial products, partially aligning them with regulations for stocks and bonds.

This change is significant as it could bring cryptocurrencies under insider trading laws. Currently, Japan’s crypto markets operate with limited regulation, and this initiative could reduce market manipulation while increasing investor confidence.

However, cryptocurrencies will not be treated the same as stocks or bonds but will have a separate status. The exact details regarding the classification of digital assets and the law’s applicability to international firms remain unclear. Also unclear was what cryptocurrencies would be regulated and how distinctions would be made between widely traded assets such as Bitcoin (BTC) and Ethereum (ETH) compared to speculative and high-risk tokens such as memecoins.

If these legislative changes are adopted, crypto service providers will be required to comply with FSA regulations. This measure reflects Japan’s broader trend of integrating cryptocurrencies into the traditional financial system amid recent pro-crypto initiatives.