Japan's Financial Services Agency (FSA) has proposed a significant reclassification of cryptocurrencies that could pave the way for the launch of crypto exchange-traded funds (ETFs) and simplify the tax system for digital assets.
Reclassification of Cryptocurrency in Japan
The proposal from the FSA suggests recognizing cryptocurrency as financial products under the Financial Instruments and Exchange Act (FIEA), changing the regulatory framework currently applied to securities and traditional financial products.
Growth of Active Crypto Accounts in Japan
According to FSA data, as of January 2025, there were over 12 million active crypto accounts in Japan, with assets held on platforms exceeding 5 trillion Japanese yen (approximately $34 billion). This indicates a growing interest in crypto investments among the Japanese populace.
Stablecoin Research in Japan
In April, Sumitomo Mitsui Financial Group (SMBC), TIS Inc, Ava Labs, and Fireblocks signed a Memorandum of Understanding to explore the commercialization of stablecoins in Japan. The collaboration aims to issue stablecoins pegged to both the US dollar and Japanese yen.
The proposed reclassification of cryptocurrency and plans for stablecoin development highlight Japan's ambition to adapt to the evolving financial landscape and strengthen its position as an investment hub.
