Japan has defined crypto assets as financial instruments in its investment legislation: the parliament approved amendments to the Financial Instruments and Exchange Act, shifting the regulation of cryptocurrencies from the logic of payment means to a stricter legal framework for the investment market.
The new rules will be applied within a year after official publication. Specific procedures will be set separately by the authorities — through cabinet decrees and supervisory instructions.
Before the reform, digital assets in Japan were mainly considered a means of payment: cryptocurrency was seen more as a settlement tool than an investment object. Now the law allocates such assets to a separate category of financial instruments but does not equate them to securities. Stablecoins will retain their previous status as electronic payment instruments.
Crypto Assets in Simple Terms
Crypto assets are digital assets that exist in electronic form and can be used for settlements, value storage, investment, or issuance of rights in a digital environment. They include cryptocurrencies, stablecoins, tokens, NFTs, and digital financial assets.
Cryptocurrency is one type of crypto asset. It usually operates on blockchain: transactions are recorded in a distributed ledger, and transaction confirmation can occur through mining or staking. Therefore, such a network often operates without a single center manually processing each transaction.
The main types of crypto assets can be divided as follows:
- Cryptocurrencies — digital coins like bitcoin and ethereum.
- Stablecoins — tokens whose value is pegged to another asset or currency.
- NFTs — non-fungible tokens linked to unique digital objects or rights.
- Project tokens — digital assets issued within specific ecosystems.
- DFA — digital financial assets that record rights to an asset or claim within a regulated platform.
The main difference is simple: cryptocurrency is issued and circulates in decentralized networks; a digital national currency, such as the digital ruble, is issued by the central bank; DFA secures digital rights in a regulated system.
Cryptocurrency Regulation in Russia and Worldwide
There is no single regulatory model. Japan is moving crypto assets into the framework of financial instruments, the US is developing the practice of admitting crypto products to the securities market, and Russia and the Bank of Russia are building their own approach to digital assets.
In Russia, cryptocurrency does not become ordinary money for domestic settlements and is separated from the digital ruble and DFA. In practice, issues of taxation, the use of cryptocurrency in payments, investor access to digital asset products, and platform requirements remain controversial.
Vladimir Putin has publicly described cryptocurrency as a technology that deserves attention but requires cautious regulation due to risks for citizens and the financial system.
What Will Change for Cryptocurrency Trading
One of the key points of the reform is the ban on transactions using significant non-public information. It will apply to crypto assets admitted to trading on crypto platforms registered in Japan.
The rules may apply to:
- Issuer employees.
- Exchange employees.
- Other market participants with access to confidential data.
This refers to confidential data about listings, trading suspensions, project changes, or major transactions. If a transaction is conducted using such information, it will be considered not just a risky market activity but a violation of investment rules.
For cryptocurrency issuers, the set of obligations will become more formal:
- Disclosure of information before asset placement.
- Notification of significant events.
- Preparation of annual reports.
If a coin has no specific issuer, as with bitcoin, the obligation to disclose data will be assumed by registered trading platforms.
This is a significant shift for the market. A crypto asset no longer appears only as digital money or a currency for settlements. In regulation, it is starting to be viewed more as an investment object: as an asset in accounting, a financial instrument for investment, and part of the infrastructure where disclosure rules are already familiar. At the same time, an ordinary share in finance, a security, and a derivative financial instrument remain separate legal categories.
Liability for Operating Without Registration Will Become Stricter
The amendments increase penalties for operating without registration.
Liability for operating without registration will change as follows:
- Maximum prison term: before the reform — 3 years, after the reform — 10 years.
- Upper limit of the fine: before the reform — 3 million yen, after the reform — 10 million yen.
- Approximate conversion to dollars: before the reform — $18,500, after the reform — $61,600.
This approach brings the crypto market closer to the more familiar logic of supervision over investment services. For platforms, this means more formal requirements, and for investors — clearer rules for access to trading and disclosure of information. In the long term, such measures may also reduce the risks of manipulation, non-transparent operations, and money laundering.
Tax Reform Will Be a Separate Package
Tax changes are not directly included in the adopted amendments. They are being discussed as part of a separate reform. The proposed model provides for separate taxation at a rate of 20.315% and the right to carry losses forward for the next 3 years.
The new tax regime is planned to be applied not to all digital assets, but only to certain crypto assets traded through operators registered in Japan. The final list of coins and rules for accounting operations will be approved by the authorities later.
Income from staking, lending, and transactions with non-fungible tokens is expected to retain the previous taxation procedure. They will continue to be classified as other income, where a progressive scale applies. The launch of tax changes is scheduled for January 1, 2028.
For comparison, in Russia, income from cryptocurrency transactions is usually declared and taxed under the general tax rules for individuals or companies. In other countries, approaches vary: profits may be treated as capital gains, investment income, or other income — depending on the local regime.
How to Invest in Cryptocurrency
The simplest way is to buy cryptocurrency through a trading platform and store the asset in your own wallet or with an operator. More complex options are staking, lending, and participation in exchange-traded funds, if such products are allowed by the regulator and admitted to trading.
For an investor, not only the coin price is important, but also the rules for disclosure, taxes, key storage, and platform status. That is why the Japanese reform emphasizes operator registration and data disclosure.
The Reform Opens the Door to Spot Exchange-Traded Funds
Transferring digital assets under the Financial Instruments Act creates a legal basis for launching spot exchange-traded funds for cryptocurrencies. According to media reports, the first listings of such funds in Japan may appear as early as 2027, and traditional financial organizations are being considered among the potential issuers.
However, approval of the amendments does not mean the automatic launch of funds based on bitcoin, ethereum, or other cryptocurrencies. Additional regulations, decisions by regulators, and separate listing rules will be required for this.
Interest in such products is not limited to Japan. Institutional investors in many countries see bitcoin as a tool to diversify portfolios, especially against the backdrop of growing market capitalization of digital assets. At the same time, approaches in different jurisdictions differ: Russia and the Bank of Russia are building their own regulatory model, while the United States is developing its own practice of admitting crypto products to the securities market.
Blockchain Is Already Being Tested in Financial Infrastructure
The reform fits into Japan’s broader course of studying distributed ledgers. In March, the Bank of Japan began experiments with blockchain technology for possible integration into financial infrastructure.
As part of the project, a test sandbox was launched. In it, the regulator is testing settlements in the form of deposits in current accounts using distributed ledgers.
This is an important signal for the crypto market: regulation, trading, taxes, and technological experiments are gradually forming a unified framework. Mining, coin circulation, investment in digital assets, and settlement infrastructure are increasingly being seen not as isolated phenomena, but as parts of a single financial market.
