While regulatory efforts targeting Bitcoin and altcoins continue worldwide, particularly in the US, the latest news comes from Japan.
According to Reuters, Japan has passed a major regulatory amendment that will fundamentally change the cryptocurrency market. The House of Councillors, the upper house of the country’s parliament, today approved a legislative amendment that officially classifies crypto assets as financial products for the first time.
With this step, Bitcoin, Ethereum, XRP, and other cryptocurrencies will now be regulated as “financial products” in the country and will have the same status as stocks and other financial products.
The change also introduces a tax of approximately 20% on cryptocurrency earnings. This change in taxation appears to be more advantageous than the old system, as in Japan, individual cryptocurrency earnings were sometimes included in income tax and fell into a much higher tax bracket.
According to reports, the tax reform is planned to be implemented as of January 1, 2028, following the regulations that will come into effect in the 2027 fiscal year.
The new law also paves the way for spot cryptocurrency ETFs in Japan. In this context, regulators reportedly aim to begin trading cryptocurrencies on the Tokyo Stock Exchange by 2027 or 2028. Indeed, major firms like Nomura Holdings and SBI Holdings have already begun preparations for cryptocurrency ETFs.
“The new regulation introduces several rules to cryptocurrencies that already apply in traditional financial markets. These include:
- Insider trading prohibited: Transactions involving the use of confidential information will be strictly prohibited.
- Disclosure Obligation: Cryptocurrency issuers will be required to submit regular annual disclosures.
- Severe Penalties: Penalties for unregistered cryptocurrency exchanges have also been significantly increased. Those who fail to register may face imprisonment of 3 to 10 years or fines ranging from 3 million yen to 10 million Japanese yen.
- Individual investment limit: The individual investment limit for high-risk tokens will be 2 million Japanese yen.
