Japanese lawmakers are on the brink of bringing in substantial changes to the country’s cryptocurrency regulatory oversight. According to reports, the government has approved a bill to amend the Financial Instruments and Exchange Act. According to the amendment, the new laws will treat cryptocurrency assets closer to investments and financial instruments. Let’s discuss what Japan’s new crypto rules will bring.
What Do Japan’s New Crypto Rules Entail?
Source: Reuters
Firstly, as mentioned above, cryptocurrencies will transition into financial instruments. This move will lead to oversight moving from the Financial Services Agency (FSA) to the Financial Instruments and Exchange Act. This transition aligns with the government’s view that people are increasingly using cryptocurrencies as investments, rather than a method of payment.
The new legislation also aims to curb insider trading while enforcing transparency. Traders will not be allowed to trade using non-public information. Crypto issuers will also have to provide regular information and disclosures. Selling of unregistered crypto assets could lead to prison sentences of up to 10 years and fines up to $62,800 (¥10 million). The fine was previously around $18,800 (¥3 million).
Taxes on cryptocurrencies will also see a massive dip. Japan’s crypto sector was among the highest taxed in the world at 55%. However, the new law will bring taxes down to 20%.
The legislation aims to tighten oversight to protect Japanese investors, while easing the cryptocurrency tax burden to drive innovation.
According to Japanese Finance Minister Satsuki Katayama, “We will expand the supply of growth capital in response to changes in financial and capital markets, and ensure fairness and transparency in the market and investor protection.”
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Nonetheless, Japan’s cryptocurrency regulation overhaul comes amid bearish market forces. While the new rules may bring in more investors, the current economic and geopolitical scenario may keep cryptocurrency investors at bay for the time being.