Japan’s Financial Services Agency (FSA) is preparing an overhaul of the country’s crypto regulatory framework, moving to classify digital assets as “financial products” under the Financial Instruments and Exchange Act.
The plan would introduce mandatory disclosures for 105 cryptocurrencies listed on domestic exchanges, including Bitcoin (BTC) and Ether (ETH), and bring them under insider trading regulations for the first time, according to a Sunday report from Asahi Shinmun.
If enacted, exchanges would be required to disclose detailed information about each of the 105 tokens they list, including whether the asset has an identifiable issuer, the blockchain technology underpinning it and its volatility profile, per the report.
The FSA reportedly plans to bring the new crypto-related law proposal to Japan’s main parliamentary meeting in 2026 for approval.
Related: Metaplanet’s Bitcoin gains fall 39% as October crash pressures corporate treasuries
Japan eyes 20% flat tax on crypto gains
The FSA is also pushing for a tax overhaul. Japan currently taxes crypto earnings as “miscellaneous income,” meaning high-earning traders can face rates of up to 55%, one of the steepest systems in the world.
The agency now wants gains on the 105 approved cryptocurrencies to be taxed similarly to stocks, at a flat 20% capital gains rate.
Another notable part of the proposal is the attempt to curb insider trading in the local crypto market. Under the bill, individuals or entities with access to non-public information, such as upcoming listings, delisting plans or an issuer’s financial distress, would be prohibited from buying or selling affected tokens.
Related: Tokyo exchange operator eyes crackdown on Bitcoin-holding firms after DAT rout
Japan Weighs Allowing Banks to Hold Bitcoin
Last month, it was reported that the FSA is considering allowing banks to acquire and hold cryptocurrencies like Bitcoin for investment purposes. Under current rules, banks are effectively barred from holding digital assets due to volatility concerns, but the FSA plans to revisit the restrictions at an upcoming meeting of the Financial Services Council.
The regulator is also reportedly exploring whether bank groups should be permitted to register as licensed cryptocurrency exchanges, enabling them to offer trading and custody services directly to customers.
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