Japan’s parliament passed legislation to regulate cryptocurrencies under the Financial Instruments and Exchange Act, considering them more like stocks and investment products. The bill was passed in the lower house on Thursday, 4 June, 2026, and the new rules are expected to come into effect next year.
The bill aims to classify crypto assets as financial instruments, ensuring lower taxes and stricter trading rules. It also plans to roll out new products like exchange-traded funds.
Inside Japan’s Strategic Shift to Crypto Assets
Japan proposed new legislation for crypto assets amid its growing demand among Japanese financial institutions and retail investors. This drive was caused by the U.S. President’s stance on cryptocurrency in the country and recent developments on the CLARITY Act and the GENIUS Act.
According to the FSA, Japan has more than 14 million open crypto accounts. Such growth is driven by low-to-middle-income everyday retail users, people earning under 7 million yen ($43,600) a year.
The Japanese government is confident that a clearer legal framework could amplify Japan’s market. Masato Yoshizawa, a representative of the Financial Services Agency’s policy and markets bureau, said the government aims to cultivate more innovation by promoting a healthy trading environment. This bill was not a stamp of approval for crypto, but a major step toward overall market growth.
Under the new proposal, crypto will be regulated as any traditional financial asset. The crypto tax will be lowered from a high of 55% to around 20%. If approved, then it would make the country one of the most attractive and healthy markets.
Policymakers believe that lowering the tax could help drive crypto investments in the country. It could reduce the barrier for both individual investors and institutional participants.
The new law will not apply to stablecoins. They will be regulated as payment services. The government also believes that stricter laws will clear out the country’s crowded crypto exchange market. Shohei Matsumoto, executive officer at Tokyo-based crypto consultancy Pacific Meta, said that large institutions could handle stricter disclosure and auditing requirements. However, it could be a heavy burden for smaller firms.
FSA Forming Stricter Rules For Transparent Markets
The FSA said the government will implement a ban on insider trading in crypto markets that function like a stock market. Company or exchange workers will be banned from buying or selling tokens if they are aware of unpublicized “material facts”.
The bill also aims to form strict “information public disclosure rules” to prevent developers from lying to the public. Every project is to maintain clarity on how its technology works, its supply, and its business finances.
FSA Preparing for Crypto ETF Approval
Japan’s Financial Services Agency (FSA) is preparing a framework for spot crypto ETFs and investment trusts. This will open a window for investors to gain exposure to cryptocurrencies like Bitcoin and other digital assets. The developments around crypto ETFs suggest that the government is trying to integrate crypto with traditional markets while ensuring investor protection standards.
Japan’s ETF support policies come amid a broader trend toward crypto ETF adoption. Several major financial markets have already integrated spot Bitcoin ETFs and similar products. Japan’s entry could strengthen the ETF space, especially in Asia, where different countries follow different approaches.
Japanese Institutions Enter the Space
Major Japanese financial and investment institutions are developing crypto-supported financial products. It includes SBI Holdings, Rakuten, Nomura Securities, Daiwa Securities, SMBC Group, and Mizuho Financial Group.
SBI Holdings is one of the active proponents of blockchain and digital asset integration in Japan. Additionally, traditional banking companies like SMBC and Mizuho Financial Group are entering the crypto space, signalling broader acceptance of digital assets within mainstream finance.
Market Implications
If spot ETFs are approved, they could become a significant regulated digital asset investment space in Asia. Financial experts believe that the total amount flowing into these Japanese crypto ETFs could quickly reach $6.4 billion. ETFs could also increase liquidity, reduce volatility, and form a bridge between traditional financial markets and the crypto industry.
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