Japan’s cabinet has approved a bill that would classify crypto assets as financial products, moving assets such as Bitcoin and Ethereum into a securities-style regulatory framework. The bill was approved on April 10, 2026, and would place crypto under the country’s Financial Instruments and Exchange Act.
Crypto moves from payment use to investment regulation
The change marks a clear shift in how Japan treats the sector. Crypto had long been handled more like a payment instrument, but the new bill reframes it as an investment asset. After the cabinet meeting, Finance Minister Satsuki Katayama said the government’s aims were to expand growth capital, maintain market fairness, and protect investors.
The proposal also lays out several concrete measures. It would introduce an insider trading ban for crypto markets, require annual disclosures from issuers, reclassify the sector under a “crypto asset trading business” framework, and regulate exchanges in a manner closer to financial institutions. Unregistered operators could face penalties of 3 million to 10 million yen and prison terms of 3 to 10 years.
Banks and insurers would be allowed to hold crypto
According to the report, banks and insurance companies would also be permitted to hold and trade crypto assets. Regulators argue that crypto is now used increasingly for investment rather than payments. Trading activity has grown, retail participation has widened, and authorities want tighter rules modeled on financial markets.
Japan already has about 12 million active crypto users, equal to roughly 15% of its adult population. That scale has added pressure for clearer regulation and wider institutional access.
Tax treatment may shift closer to equities, with 2027 as target
Tax reform is another major part of the policy package. The report says capital gains on crypto could move from a progressive rate of as much as 55% to a flat 20%, aligning crypto taxation more closely with traditional equities.
If the bill passes during the current Diet session, full implementation is expected in fiscal 2027. Japan has also indicated a next step beyond classification rules: in January 2026, the country signaled that its first crypto ETFs could be listed as early as 2028. For a market shaped by the legacy of the Mt. Gox collapse, the current direction is clear: tighter oversight, broader access, and a more formal place for digital assets inside the financial system.