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Japan’s FSA to Propose Reclassifying Cryptocurrencies as Financial Products by 2026
The Japanese Financial Services Agency (FSA) has announced plans to reclassify cryptocurrencies as financial products by 2026. This move aims to curb insider trading and improve market oversight in the rapidly growing cryptocurrency space.
The proposal, which is still under review, seeks to treat digital assets as financial instruments rather than payment tools, a distinction that will have significant implications for the industry. Currently, cryptocurrencies are categorized as “means of settlement” under the Payment Services Act, a classification that has created regulatory gaps and failed to address issues such as insider trading in crypto markets.
The FSA’s decision is part of Japan’s broader effort to strengthen oversight of its growing cryptocurrency market. The country has been taking steps to improve regulation in recent months, including issuing its first license for a company to deal with stablecoins and considering lifting a ban on crypto-based exchange-traded funds (ETFs).
Japan has been increasingly interested in the potential of cryptocurrencies, particularly Bitcoin, as an investment opportunity. In fact, senior research analyst Jay Jo believes that lowering taxes on crypto investments could “attract more institutions to crypto investments.” This proposal reflects this growing interest and acknowledges the significant role digital assets now play in the financial system.
The FSA’s move is also seen as a response to rising fraudulent activities in Japan’s cryptocurrency market. The country has seen an increase in adoption, which has led to a corresponding rise in scams and other types of illicit activities. By reclassifying cryptocurrencies as financial products, the government hopes to establish clear rules and prevent abuses.
It remains to be seen how this proposal will impact the cryptocurrency space in Japan and globally.
Source: https://blockonomi.com/japans-fsa-to-propose-reclassifying-cryptocurrencies-as-financial-products-by-2026/
