Japan Proposes Major Overhaul to Crypto Regulation Framework

Japan is advancing major reforms to its crypto asset regulation framework, aiming to align it with how these assets are used in practice.

The Financial Services Agency (FSA) has proposed treating digital assets as financial instruments, shifting oversight from the Payment Services Act to the Financial Instruments and Exchange Act. This transition separates crypto assets from payment-focused frameworks and aligns them with investment instruments, while still distinguishing them from traditional securities.

The proposal reflects growing recognition of crypto assets as investment vehicles and the need for consistent rules across financial markets.