Japan's Financial Services Agency (FSA) is taking steps to reclassify cryptocurrencies as "financial products" under the Financial Instruments and Exchange Act, as noted by a local publication on Sunday.
This reform would impose strict disclosure requirements on the 105 cryptocurrencies traded on domestic exchanges, such as Bitcoin and Ether, and subject them to official insider trading regulations for the first time.
The proposal, which is scheduled for parliamentary review in 2026, also includes a major tax reform.
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The FSA advocates replacing the current "miscellaneous income" tax, which can reach 55%, with a flat tax rate of 20% on capital gains, aligning the taxation of cryptocurrencies with that of stocks.
This change aims to ease the burden on traders and create a more standardized financial environment.