Regulatory Shift: Japan to Treat Crypto as Investment, Not Payment
A major regulatory transition is imminent in Japan, as oversight of crypto assets is poised to exit the payments realm and enter the world of securities law. This move aligns the country’s approach with the growing use of crypto for investment.
This plan was unveiled in a comprehensive report published by Japan’s Financial Services Agency. The findings come from a dedicated working group within the Financial System Council.
The key legal change involves shifting regulation from the Payment Services Act to the Financial Instruments and Exchange Act. The FIEA is Japan’s primary legislation for regulating investment markets and ensuring proper disclosures.
The report explicitly links the shift to investor protection, noting the global and domestic trend of using crypto assets for investment purposes. Regulation as a financial product is deemed the appropriate path.
Specifically, bringing crypto under the FIEA would strengthen disclosure requirements for initial exchange offerings. These are sales of new tokens conducted through established crypto exchanges.
“Crypto transactions conducted by users are similar to securities transactions,” the document reads. It highlights that whether buying new or existing assets, timely information is essential for user protection in these offerings.
