Japan’s House of Councillors has passed amendments to the Financial Instruments and Exchange Act and the Payment Services Act that would reclassify crypto assets from a means of payment to financial products, according to CoinPost, as cited by ChainCatcher.
Key revisions cover licensing, insider trading and disclosure
The bill renames crypto asset exchange operators as crypto asset trading operators. It also raises penalties for unregistered sales, with the maximum prison term increasing from up to three years to up to 10 years and fines rising from up to 3 million yen to up to 10 million yen.
It introduces insider trading rules for crypto assets for the first time, barring trades that use material nonpublic information. Certain crypto asset issuers will also be required to make regular annual disclosures.
Tax changes are expected from 2028
On taxation, the planned framework would move from comprehensive taxation of as much as 55% to separate self-assessed taxation at about 20%. It would also allow losses to be carried forward for three years. The changes are expected to take effect on Jan. 1, 2028.
ETF framework included as attention shifts to detailed rules
The bill also provides an institutional framework for crypto exchange-traded funds, or ETFs. Japan Exchange Group is expected to push for ETF listings around 2027.
With the bill passed, the next focus will be on drafting detailed rules through cabinet orders and supervisory guidelines, including reserve requirements and leverage limits for derivatives. The report said compliance costs may pressure smaller exchanges, while opening more room for asset managers, banks and insurance institutions to enter the market.