Japan Crypto News: FSA Plans Major Crypto Regulations by 2026

Japan is working to tighten its laws governing cryptocurrencies. The Financial Services Agency (FSA) is developing new laws to prevent fraud and insider trading. Additionally, these rules will simplify things for stablecoin issuers and change how digital assets are classified.

New Crypto Rules by 2026

The FSA will update the Financial Instruments and Exchange Act. This change will classify cryptocurrencies as financial products. Bitcoin and other digital assets are currently considered settlement tools under the Payment Services Act.

They will fall into a category more akin to conventional financial securities under the new law.

According to reports, its parliament could receive the bill by 2026. If approved, companies promoting crypto investments must register with regulators. This move aims to protect investors and increase transparency in the crypto market.

Why Stricter Rules Are Needed

In Japan, cryptocurrency trading has expanded rapidly. More than three times as many accounts were active in 2024 (7.1 million) as there were five years prior. This quick growth has sparked worries about fraud and price manipulation.

Numerous investors have expressed dissatisfaction over being duped into purchasing digital assets. Authorities will be able to keep a closer eye on market activity thanks to these regulations. Stricter regulations may also apply to foreign businesses that provide crypto-related services to Japanese investors.

Japan’s Move to Amend Crypto Laws

An amendment to the Payment Services Act was approved by the Japanese Cabinet earlier this year. The bill seeks to loosen laws governing cryptocurrency brokerages and stablecoins. This might entice more companies to join the cryptocurrency market.

The bill has already been sent to the National Diet, Japan’s parliament. If approved by both houses, it will then be sent to the Emperor for final approval. The amendment process includes debates and possible changes before it becomes law.

Changes in Stablecoin Regulations

Stablecoins are cryptocurrencies that are connected to traditional assets like cash or bonds. In Japan, issuers of stablecoins must keep a corresponding amount of cash deposits in regulated banks. Issuers will be able to use bonds and fixed-term deposits as collateral under the new law. But these assets can only hold half of their reserves.

A New Category for Crypto Brokerages

The legislation also introduces a separate category for crypto intermediaries. At the moment, broking houses in Japan are subject to the same regulations as cryptocurrency exchanges. These companies will benefit from the new classification. It will facilitate their operations while adhering to the regulations.

Impact on the Crypto Market

Japan's digital asset market is expected to change as a result of these new rules. Businesses and investors are closely observing how these changes will impact trading. The objective is to prevent insider trading and fraud while fostering a safer environment for cryptocurrency traders, protecting against scams in Japan .

As the cryptocurrency industry grows, more governments are looking for ways to regulate it. it is committed to preserving an open and fair market, evidenced by its recent actions.