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- Japan’s Financial Services Agency plans to revise financial laws by 2026, officially classifying crypto assets as financial products.
- Additionally, Japan has approved Circle’s USDC stablecoin, marking it as the first foreign stablecoin compliant with the country’s strict 2022 payment laws.
Japan intends to fully commit to officially classifying crypto assets as financial products. This will be made possible by Japan’s Financial Service Agency as it plans to revise the Financial Instruments and Exchange Act.
Notably, by early 2026, the FSA intends to introduce a bill to the National Diet, aiming to amend legislation that will improve investor protection and more comprehensively incorporate cryptocurrencies into Japan’s financial system.
A very interesting aspect of the proposed revisions will be the extension of insider trading regulations to include digital assets. Currently, these regulations apply to only traditional securities. These regulations prohibit trading based on undisclosed , material information.
By including cryptos as financial products, Japan is working towards eliminating market manipulation while at the same time promoting transparency within the crypto market.
Importantly, classifying crypto assets as financial products may lead to significant tax reforms. At the current moment, crypto transactions in Japan fall under the miscellaneous income category. Notably, this category is subject to taxes as high as 55%.
Importantly, the proposed changes could see these profits taxed similarly to other traditional financial investments. This means a flat rate of approximately 20%. Such adjustments would not only simplify the tax process for investors but also enhance crypto adaptability.
Taking a deeper dive into the benefits of the adjustments is the potential introduction of crypto-based products. Treating crypto assets on par with securities could pave the way for the introduction of cryptocurrency-based ETFs in Japan. However, this development would require careful consideration of market dynamics and investor protection measures.
Additionally, the FSA’s proposed amendments underscore a commitment to safeguarding investors and ensuring the integrity of Japan’s financial markets. By imposing stricter disclosure requirements and extending regulatory oversight to crypto assets, the FSA aims to mitigate risks associated with digital asset investments. This proactive approach seeks to balance innovation in the financial sector with robust consumer protection.
Japan Greenlights USDC
On top of that, Japan has been making significant strides when it comes to the world of crypto. Notably, earlier last week, Circle’s dollar-pegged stablecoin, USDC, secured approval from Japan’s Financial Services Agency (FSA), becoming the first foreign stablecoin compliant with the nation’s strict 2022 payment laws.
The FSA’s decision, finalized after a 24-month review, allows Circle to roll out USDC through a partnership with SBI Holdings, one of Japan’s largest financial conglomerates. Starting March 26, SBI VC Trade will enable USDC trading, with platforms like Binance Japan and BitFlyer following suit.
Japan’s stablecoin regulations, enacted post-TerraUSD collapse, mandate full fiat backing and instant redemptions. USDC’s compliance with these rules positions it as a liquidity tool for institutions and retail traders seeking dollar exposure without traditional banking delays.
Jeremy Allaire, Circle’s CEO, emphasized Japan’s role as a “testing ground” for regulated stablecoin adoption in Asia. SBI’s Yoshitaka Kitao added that the collaboration aims to modernize Japan’s payment rails using blockchain efficiency.
