Japanese government finalises stance on cryptocurrencies and futures trading
In Japan, against a backdrop of growing recognition of cryptocurrencies as investment assets and market expansion, large-scale legislative reforms are being rapidly implemented, and the development of new financial products is also progressing.
Firstly, a bill to transfer the regulation of cryptocurrency trading from the current ‘Payment Services Act’ to the ‘Financial Instruments and Exchange Act (FIEA)’ was passed by the House of Councillors’ Committee on Financial Affairs on 10 June. As a result, cryptocurrencies will be legally classified as ‘financial instruments’, distinct from securities.
Consequently, trading firms and investment management and advisory services will be subject to regulations as stringent as those for Type 1 Financial Instruments Firms, and new regulations will be introduced to address unfair trading practices such as insider trading. Furthermore, the framework for investor protection will be significantly strengthened, including raising the penalty for unregistered operators to a maximum of 10 years’ imprisonment.
Furthermore, in anticipation of the enforcement of these legislative amendments, tax reforms have already been prepared to apply a 20% separate tax on capital gains from the transfer of certain crypto-assets, as well as a three-year loss carry-forward deduction; these are expected to come into effect from the year following the date of enforcement.
In line with these legislative developments, investment trusts and exchange-traded funds (ETFs) incorporating crypto-assets are expected to be permitted in Japan as early as 2027 or 2028. Amid growing market interest, with 11 major securities firms already considering sales or finalising their policies, the Osaka Exchange—renowned as a Japanese futures exchange—has announced plans to begin trading ‘Bitcoin futures’ as early as 2028. This move is intended to meet the risk hedging needs of institutional investors entering the market, with a view to the future lifting of the ban on ETFs.
Thus, with the establishment of legal safeguards, the development of tax frameworks, and the emergence of new investment products, Japan’s crypto-asset market is entering a major turning point.
Sauce：Bills relating to the Financial Services Agency in the 221st Session of the Diet - Financial Services Agency https://www.fsa.go.jp/common/diet/221/index.html
Sauce：Bill to Amend Certain Provisions of the Financial Instruments and Exchange Act and the Payment Services Act https://www.sangiin.go.jp/japanese/joho1/kousei/gian/221/meisai/m221080221057.htm
Sauce：Osaka Exchange President Tagaya: ‘Considering the launch of Bitcoin futures in 2028’ – Nikkei https://www.nikkei.com/article/DGXZQOUB107H50Q6A610C2000000/
