Japan’s parliament has passed a law amendment that designates Bitcoin & cryptocurrency assets as “financial assets,” according to a report from NHK news on Wednesday.
The change marks a significant shift for the country’s digital asset sector, which previously operated under the “Payment Services Act.”
What the change means
By moving cryptocurrencies into the category of financial assets, Japan is bringing them under a tighter regulatory umbrella.
This reclassification means digital assets will now be subject to rules governing insider trading, similar to traditional securities.
The amendment also introduces stricter penalties for unregistered trading activity, aiming to close gaps that existed under the older payments framework.
A growing market
The regulatory update comes as Japan’s crypto industry continues to expand.
The number of user accounts on cryptocurrency exchanges in the country has grown steadily over recent years.
With regulatory easing on the horizon, domestic crypto players have been jostling for market share as they prepare to reach a wider audience of Japanese investors.
Timeline for implementation
While the law has now passed, the new treatment will not take effect immediately.
NHK reported that the change in classification is expected to come into effect within a year.
The reporting on the legislation was provided by Anton Bridge, with editing by Louise Heavens for Reuters.
