Japan will move the regulation of crypto assets from the Payment Services Act to the Financial Instruments and Exchange Act.

【BitPush】Japan’s regulatory approach to crypto assets has recently undergone a significant adjustment.

The Financial Services Agency (FSA) released a working group report this Wednesday, with the core content being: they plan to move the regulatory framework for crypto assets from the original “Payment Services Act” (PSA) to the “Financial Instruments and Exchange Act” (FIEA). In simple terms, crypto currencies will no longer be regarded as “payment tools,” but as “investment products” to be regulated.

Why make this change? The report states that crypto assets are increasingly being considered as investment targets both domestically in Japan and globally, so there is a need to protect users using the standards of financial products.

What specific changes will this bring?

Firstly, information disclosure for IEOs (Initial Exchange Offerings) will become more stringent. Once included under FIEA, exchange-led IEOs must disclose more detailed information before the pre-sale: who the core team is, whether an independent third party has conducted a code audit, and how self-regulatory organizations view the project—all must be made transparent.

Secondly, project teams can no longer hide information. Whether it’s a centralized or decentralized project, issuers must be real-name registered, and how tokens are issued and distributed must also be clearly explained.

Furthermore, enforcement powers will be strengthened. Under the new framework, regulators will have more tools to crack down on unregistered platforms, especially overseas ones or operators of decentralized exchanges (DEX). Insider trading will also be explicitly prohibited. This direction aligns closely with the EU’s MiCA and South Korea’s regulatory approach.

Taxation is also being synchronized. The Japanese government is considering a unified tax rate of 20% on crypto trading profits.

However, the FSA remains cautious about licensing derivatives for overseas crypto ETFs. They stated on the same day that the underlying assets of such products are not ideal.

Overall, Japan’s recent adjustment signals a clear message: crypto assets are no longer just accessories of payment tools, but should be regulated according to investment product standards.