The Japanese parliament has approved an amendment to the Financial Instruments and Exchange Act that officially classifies cryptocurrencies like Bitcoin as financial assets.
The move marks a major shift in Japan’s approach to digital assets.
Previously, cryptocurrencies were regulated under the Payment Services Act and were considered a method of payment.
Under the new framework, cryptocurrencies will now be treated like traditional financial instruments, including stocks and securities.
Under the new law, all cryptocurrency transactions will be subject to insider trading rules.
Investors and companies will no longer be allowed to buy or sell crypto assets using confidential information that has not been publicly disclosed, similar to the rules imposed on stock markets.
In addition, companies issuing new cryptocurrencies for the purpose of raising funds are required to increase transparency.
They will have to disclose how the funds raised will be used to provide better protection for investors and increase confidence in the market.
The legal amendments are expected to take effect within a year.
The Japanese government believes that the measure will strengthen investor protection while increasing confidence in the country's digital asset market.
Japan has previously been known as one of the most crypto-friendly countries among the world's major economies.
Rather than imposing strict restrictions, the country's regulators have chosen to develop a clear framework to support the growth of the digital asset industry.
Analysts believe that the new regulations have the potential to attract more institutional investors to the Japanese crypto market.
At the same time, the measure is expected to strengthen Tokyo's position as one of the main hubs for the development of blockchain and Web3 technology in Asia.
