Japan's Financial Services Agency (FSA) has considered rules that would define cryptocurrencies as financial products subject to insider trading regulations.
The regulations will reduce the tax rate on profits for firms, requiring exchange service providers to disclose data such as the risk of price volatilisation, applying to 105 types of cryptocurrencies available in Japan, like Bitcoin and Ethereum.
The crypto sector in Japan
Under these new rules, banks and insurance firms will be allowed to sell crypto through their securities subsidiaries to depositors and insurance holders. Profits earned from these transactions will be subject to a 20% tax rate instead of the previous 55%, equal to the tax for stock trading.
The regulator aims to pass the necessary legislation in next year’s ordinary parliament session, according to Asahi, a Japanese newspaper. The FSA did not yet respond to a request for comment.
The move comes as the organisation reviewed regulations that may allow banks to acquire and hold crypto such as Bitcoin for investment purposes. The shift in policy marks the removal of guidelines that ban banks from holding crypto due to volatility risks, aligning crypto management with traditional financial products such as government bonds or stocks.
The FSA is also pondering whether or not to allow banks to act as crypto exchanges and offer trading and custody solutions. As the industry grows, with more than 12 million crypto accounts registered as of February 2025, Japan aims to place digital asset regulation under the Financial Instruments and Exchange Act (FIEA).
Meanwhile, banks in the country, including Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corp. (SMBC) and Mizuho Bank, collaborate to issue a yen-pegged stablecoin and reduce costs while simplifying corporate settlements. The FSA approved this initiative, clearing the way for fintech JPYC to issue a digital currency pegged to the JPY.
