Japan’s push to tighten oversight of digital assets moved forward after the lower house of parliament approved a bill to classify cryptocurrencies as financial instruments. The measure, passed on June 10 by the Finance and Financial Affairs Committee, now heads to the House of Councillors, where final approval is expected.
crypto to be treated like traditional securities
If enacted, the law would bring cryptocurrencies under a framework similar to stocks and bonds, marking a major shift in how the market is regulated and operated. The change would take effect next year, introducing stricter trading rules and compliance requirements for market participants.
The proposal, submitted by the cabinet in April, expands regulation beyond the current Payment Services Act. That law treats cryptocurrencies primarily as a means of payment, rather than as financial products, and is overseen by Japan’s Financial Services Agency.
tax changes coming, but not immediately
A key headline change is a planned revision to how crypto gains are taxed. The proposal includes reducing the tax rate from as high as 55% to a flat 20%, aligning it with traditional securities.
However, the lower tax rate is not expected to take effect until 2028. Until then, the existing tax structure will remain in place, shaping trading strategies in the near term.
etfs and new products could follow
Reclassification under financial law is expected to open the door for new products tied to digital assets. The Japan Exchange Group has indicated that ETFs tracking cryptocurrencies could begin trading as early as next year, providing new ways for traders to access the market.
At the same time, stricter compliance and auditing requirements may raise operational costs. This could drive consolidation among Japan’s 27 registered crypto exchanges, with smaller platforms potentially exiting or merging to meet the new standards.
stablecoins remain under separate rules
The legislation does not cover stablecoins, which will continue to be regulated under payment services laws. Japan has already taken steps to expand this segment.
Revisions in 2023 introduced the concept of “electronic payment instruments,” allowing regulated entities and banks to issue stablecoins. Adoption has accelerated since then. JPYC Inc. launched a yen-pegged stablecoin in October 2025, followed by SBI Holdings and Startale Group’s JPYSC in early 2026 for cross-border and institutional use.
More than 3.8 billion yen worth of JPYC has been issued since launch, reflecting steady demand for regulated digital payment tools.
major banks and institutions step in
Large financial institutions are preparing for deeper involvement in digital assets. MUFG, Mizuho, and SMBC are working on a jointly managed stablecoin, targeting live operations by the fiscal year ending March 2027.
SBI Holdings has also expanded its presence through exchange acquisitions and product development, while SBI Shinsei Bank plans to introduce a cryptocurrency rewards program for depositors later this year.
The bill’s progression signals Japan’s broader effort to integrate digital assets into its financial system while tightening oversight, setting the stage for a more structured and institutionally driven market.
As Japan tightens crypto rules, explore how stablecoins shape Asia’s digital finance and what that means for future regulation.
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