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 would bring them under insider trading regulations for the first time, according to on Sunday’s Asahi Shinmun report.
If enacted, exchanges would have to disclose detailed information about each of the 105 tokens they list, including whether the asset has an identifiable issuer, the blockchain technology it’s based on and its volatility profile, according to the report.
The FSA is reportedly planning to bring a new crypto-related bill to the 2026 main meeting of Japan’s parliament for approval.
Related: Metaplanet’s Bitcoin profits fell 39% due to October’s decline under pressure from corporate treasuries
Japan is planning a flat tax of 20% on crypto winnings
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 strictest systems in the world.
The agency now wants gains from the 105 approved cryptocurrencies to be taxed similarly to stocks, at a flat capital gains rate of 20%.
Another significant part of the proposal is an 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 issuers’ financial difficulties, would be prohibited from buying or selling affected tokens.
Related: A Tokyo exchange operator is planning tougher measures against companies holding Bitcoin following the DAT collapse
Japan Considers Allowing Banks to Hold Bitcoin
Last month it was reported that the FSA was considering allowing banks to acquire and hold cryptocurrencies like Bitcoin for investment purposes. Under current rules, banks are effectively banned 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 investigating whether groups of banks should be allowed to register as licensed cryptocurrency exchanges, which would allow them to offer trading and custody services directly to clients.
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