Japan to Regulate Crypto as Financial Products by 2026, Insider Trading Rules to Follow

March 31, 2025 – Japan is preparing a significant shift in its approach to digital assets. According to Nikkei, the country’s Financial Services Agency (FSA) plans to legally classify crypto assets as financial products under the Financial Instruments and Exchange Act by 2026. This reclassification would bring cryptocurrencies under the same legal framework that governs traditional securities such as stocks and bonds.

Crypto to Be Treated Like Stocks and Bonds

The proposed legislative amendment signals a notable evolution in how Japanese regulators view digital assets. By treating crypto like other financial instruments, the FSA intends to close the regulatory gap between traditional finance and the rapidly growing crypto industry.

Currently, Japan regulates crypto under the Payment Services Act, focusing mainly on anti-money laundering and exchange operations. However, this new approach would elevate crypto assets into the realm of financial investments, granting authorities broader enforcement tools and oversight capabilities.

Insider Trading Rules Coming to Crypto Market

One of the most consequential additions to this framework is the application of insider trading laws to the crypto market. If passed, the law would prohibit individuals from using confidential or non-public information to trade crypto assets, mirroring restrictions long enforced in equity markets.

The introduction of these rules aims to increase market transparency and prevent manipulation—issues that have frequently plagued the global digital asset space.

Legislative Timeline: Targeting 2026

The FSA is expected to draft the bill and submit it to Japan’s parliament as early as 2026. Although specific timelines may shift, policymakers appear committed to moving forward with this regulatory overhaul in the near term.

Experts view the move as part of a broader effort by Japan to refine its digital asset laws while maintaining its position as one of the most crypto-forward nations among developed economies.

Implications for the Industry

This decision could reshape how both domestic and international players operate in Japan’s crypto market. Exchanges, token issuers, and institutional investors may soon face stricter compliance requirements, including disclosures, reporting obligations, and insider information controls.

At the same time, the move could attract more institutional investment by offering a clearer regulatory environment and enhancing investor protections—two key factors often cited by traditional finance players wary of entering the crypto space.

Community Reaction

• Mostly Positive – Users see Japan’s move as a major step toward legitimacy, though some remain unsure.

@BitBullVault: More sushi for all
@BullsBytes: From taboo to financial product. Adoption isn’t coming, it’s compounding.
@Novanoodle5165: Is this good?

Is Japan leading the way in crypto regulation, or just tightening the leash?

Japan’s Role in Global Crypto Regulation

Japan has often taken a proactive stance in regulating digital assets. It was one of the first countries to recognize Bitcoin as legal tender and to impose licensing requirements on crypto exchanges following the Mt. Gox collapse. Now, by aligning crypto with traditional financial products, Japan continues to position itself as a model for responsible crypto regulation on the global stage.

As digital assets become increasingly integrated into global finance, Japan’s approach may influence how other nations structure their crypto policies—especially as regulators worldwide grapple with how to handle this emerging asset class.