Japanese Finance Minister "Need to integrate virtual assets through exchanges"…signals strengthening ties with traditional finance

The Japanese government appears to be pushing measures to integrate virtual assets (cryptocurrencies) into the traditional financial system centered on stock and commodity exchanges.

On the 5th, according to crypto-focused media The Block, Japanese Finance Minister Satsuki Katayama said in a New Year's speech held at the Tokyo Stock Exchange, "Stock and commodity exchanges play a decisive role in opening public access to digital assets and blockchain-based assets."

Katayama referenced examples from the United States and emphasized that exchange-traded products for virtual assets are being used as an inflation hedge. This suggests that similar financial products and institutional links could be possible in Japan. Currently, virtual asset ETFs are not permitted in Japan.

He designated 2026 as the 'Year of Digital' and also stated that he will fully support stock and commodity exchanges in building an innovative trading environment using cutting-edge technology. The integration of virtual assets is interpreted to mean that it is not a short-term policy but part of a medium- to long-term overhaul of the financial structure.

In addition to digital asset issues, Katayama said this year could be a turning point for resolving Japan's structural economic challenges. The plan is to address the long-term deflation problem through fiscal policy and investments in growth industries.

Japanese financial authorities are already accelerating regulatory adjustments. In November of last year, the Financial Services Agency finalized a plan to reclassify 105 major virtual assets, including Bitcoin and Ethereum, as financial products. Through this, it plans to expand the scope of virtual asset use within the existing financial regulatory framework.

It is also pushing to reduce the tax rate applied to those virtual assets from the current maximum of 55% to around 20%. Earlier, the Financial Services Agency examined the possibility of allowing banks to hold and trade virtual assets, and it has also approved the yen-linked stablecoin JPYC.

The outlet reported, "This move by the Japanese government is interpreted as an extension of a strategy to incorporate virtual assets not as independent speculative assets but as regulated assets combined with traditional finance."