Japan's Financial Services Agency to Push for Legal Amendments Recognizing 'Virtual Assets as Financial Products'

Uk Jin

Summary

The Financial Services Agency of Japan has announced plans to push for legal amendments recognizing virtual assets as financial products.
Upon completion of the legal amendment, virtual assets will gain the status of financial products like stocks and bonds, and plans to establish laws to prevent insider trading have been announced.
It has been reported that there is a discussion on the possibility of lowering the tax rate on virtual assets to be the same as financial income.

In Japan, virtual assets (cryptocurrencies) are expected to receive the same legal status as financial products. The Financial Services Agency of Japan is set to implement legal amendments related to virtual assets.

According to the Nihon Keizai Shimbun on the 31st, the Financial Services Agency of Japan plans to submit an amendment to the Financial Instruments and Exchange Act by 2026. This amendment includes recognizing virtual assets as financial products.

The Financial Services Agency of Japan intends to announce the policy for institutional amendments in June and finalize the submission to the National Diet after discussions on the amendment at the Financial System Council. Since last October, the Financial Services Agency of Japan has been reviewing the current system through closed expert meetings.

Currently, virtual assets in Japan are only defined as a means of payment under the 'Payment Services Act.' However, once this legal amendment is completed, virtual assets will be recognized as financial products, like stocks and bonds.

As the Financial Services Agency recognizes virtual assets as legal financial products, it plans to establish related laws to prevent unfair trading and strictly crack down on insider trading.

Additionally, it is reported that the Financial Services Agency of Japan is discussing the possibility of lowering the tax rate, which is up to 55%, to 20%, the same as financial income.