FSA to Redefine Crypto as Financial Products in Japan

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Financial Services Agency to Redefine Crypto as Financial Products in Japan

Written by Aaron S.,

Editor-In-Chief

Last Updated: November 17, 2025

Key Takeaways

Japan’s FSA aims to classify 105 cryptocurrencies as financial products under existing investment laws by 2026;
New rules would require exchanges to disclose key details about each listed crypto, including issuers and volatility;
The FSA proposes switching crypto tax from income-based to a flat 20% rate, which matches how stock gains are taxed.

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Financial Services Agency to Redefine Crypto as Financial Products in Japan

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Japan’s financial regulator is preparing to update how digital currencies are treated under national law, according to a report from Asahi Shinmun.

The Financial Services Agency (FSA) plans to treat many cryptocurrencies like traditional financial investments. This change would fall under the country’s Financial Instruments and Exchange Act.

The update would cover 105 cryptocurrencies currently listed on approved local platforms. Popular assets such as Bitcoin BTC $91,909.63 and Ethereum ETH $3,136.89 are included.

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Under the proposed rules, companies that operate exchanges would have to share clear details about each crypto they offer. This would include information such as the token’s issuer, the blockchain it runs on, and how its value tends to move over time.

The FSA also wants to introduce rules that prevent unfair use of inside information. People who know about upcoming changes, such as when a coin will be added or removed from an exchange, would no longer be allowed to trade based on that knowledge.

Another part of the plan focuses on taxes. Currently, profits from crypto trading in Japan are seen as "miscellaneous income". This system can lead to tax rates as high as 55%, depending on income.

Therefore, instead of treating crypto earnings as other types of personal income, the FSA wants to apply a flat 20% tax rate, as with stock investments.

This full set of changes is expected to be presented to the national legislature in 2026.

Japan Exchange Group (JPX) recently considered tighter oversight for listed companies that shift their business toward holding Bitcoin. What did the agency say? Read the full story.