What Direction is Japan's Cryptocurrency Regulation Heading? ── Financial Services Advisory Council WG

The Financial Services Agency's Working Group on Cryptocurrency Systems has compiled a draft report.

As the investment in cryptocurrency assets progresses, the plan is to strengthen user protection by shifting the regulatory basis from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), applying the same regulations as those for securities firms.

The draft includes the establishment of new regulations on insider trading and the lifting of restrictions on bank subsidiaries entering the cryptocurrency exchange business.

Following this, the creation of legislation based on the draft report will intensify, with work progressing towards the submission of amendments to the FIEA and Payment Services Act in the regular session of the Diet in 2026. Prior to this, discussions will focus on the separate taxation of cryptocurrencies in the ruling party's tax reform outline to be formulated in December...