Japan classifies cryptocurrencies as financial securities under new law

On July 15, Japan’s House of Councillors passed an amendment to the Financial Instruments and Exchange Act, bringing virtual currencies under the same regulatory framework as other financial securities. The legislation redefines crypto‑exchange operators, raises penalties for unregistered sales to up to ten years imprisonment and a ¥10 million fine, and sets the stage for domestic crypto exchange‑traded funds.

Key economic provisions include a shift in tax treatment: crypto income will move from a combined marginal rate that could reach 55 % to a separate 20 % tax rate, with loss‑carry‑forward rules introduced. The law also clarifies that crypto assets may be eligible for exchange‑traded funds, a move expected to attract institutional capital. Implementation is slated for fiscal 2027, with the tax regime becoming effective in 2028.

The regulatory certainty is prompting major financial groups to increase exposure. SBI Holdings has acquired Bitbank for ¥467 billion, aiming to build Japan’s largest crypto platform, while traditional securities firms such as Daiwa and Nomura are testing tokenisation of real‑world assets. These developments suggest a rapid expansion of Japan’s crypto market, which already hosts over 14 million accounts and ¥3.7 trillion in deposits.