On April 10, 2026, the Japanese cabinet approved a draft law that officially reclassifies cryptocurrencies as financial instruments within the meaning of the Financial Instruments and Exchange Act – the same act that has been regulating the stock and bond market in the Land of the Rising Sun for decades. Bitcoin, Ethereum and another 103 digital assets are no longer treated as payment applications. They become full-fledged investment products.
What exactly does the act change?
The new regulations introduce a ban on insider trading, mandatory annual data disclosures by token issuers, and a reclassification of cryptocurrency exchanges to the “crypto asset trading business” category – with obligations comparable to those of traditional financial institutions. Sanctions for operating without registration? 3 million to 10 million yen fine and 3 to 10 years in prison. No joke.
Moreover, banks and insurance companies will be able to directly own and trade crypto assets. This is potentially one of the biggest institutional breakthroughs on the Japanese market since 2017.
Japan and the tax revolution that has been waited for for years
The current taxation system for profits from cryptocurrencies in Japan was simply brutal – a progressive rate of up to 55%. The new regulations reduce it to a flat tax of 20%, which is exactly the amount paid on profits from shares. For approximately 12 million active crypto users in Japan – approximately 15% of the adult population – this is a change that has a real impact on the wallet.
What’s next?
If the bill passes the Japanese Diet in the current parliamentary session, full implementation is planned for fiscal year 2027. Japan has already signaled the next step – the first cryptocurrency ETFs may appear on local exchanges as early as 2028.
A country that painfully experienced the fall of Mt. Gox has drawn conclusions and is consistently building one of the most regulatory-mature digital markets in the world.
