1. Transition to Financial Instruments Law and Regulatory Framework Shift
A revised law has been enacted, redefining cryptocurrencies from their traditional role as a payment method to a financial product distinct from securities, transitioning the regulatory framework from the Payment Services Act to one centered on the Financial Instruments and Exchange Act (FIEA).
2. Introduction of Insider Trading Regulations and Mandatory Information Disclosure
To enhance market fairness, new insider trading regulations have been established, prohibiting trading based on undisclosed material information by issuers and others. Additionally, cryptocurrencies with specific issuers are subject to mandatory information disclosure.
3. Introduction of Separate Taxation and Potential Approval of ETFs
Based on the transition to the FIEA, the capital gains tax on cryptocurrency sales will shift from a maximum of 55% comprehensive taxation to 20.315% separate taxation, with the possibility of carrying forward losses. This regulatory development raises expectations for institutional investor participation and the potential approval of cryptocurrency ETFs in Japan.
Japan's cryptocurrency regulation was initially structured under the revised Payment Services Act enacted in April 2017, assuming the use of cryptocurrencies as a payment method. However, as the market evolved, trading aimed at profit from price fluctuations expanded, creating a gap with the existing system. According to the JVCEA (Japan Virtual and Crypto Assets Exchange Association), the number of accounts opened with domestic cryptocurrency exchange operators exceeded 14 million as of July 2026, with user deposits reaching 2 trillion yen.
Meanwhile, the number of consultations regarding cryptocurrencies has been on the rise, necessitating enhanced user protection and market discipline in line with market expansion. In addition to these domestic market conditions, there is a growing international trend to treat cryptocurrencies as part of financial products, with the SEC in the United States approving a Bitcoin spot ETF and the application of MiCA (Markets in Crypto-Assets Regulation) commencing in Europe.
In Japan, the "Act Partially Amending the Financial Instruments and Exchange Act and the Payment Services Act" was enacted on July 15, 2026. The Financial Services Agency explains that the amendment aims to transition from a system centered on the Payment Services Act to one centered on the Financial Instruments and Exchange Act (FIEA), considering the reality that cryptocurrencies are traded as investment targets. Furthermore, it positions cryptocurrencies as "financial products distinct from securities," indicating a policy to establish regulations tailored to their characteristics.
