Japan Pushes to Legalize Crypto While Dishing Out Restrictions to Mitigate Insider Trading

Key Insights

• Japan is looking to Legalize Crypto by updating its Financial Instruments and Exchange Act.
• The Country’s Financial Services Agency (FSA) is set to submit legislation to that effect in 2026
• Japan’s crypto industry can be described as young and evolving, with the country still lagging in the Asian continent regarding crypto adoption.

Japan is pushing to legalize Crypto in the country while setting restrictions to counter the threat of Insider Trading

The Asian Country’s Financial Services Agency (FSA) is looking at submitting legislation to the country’s parliament in 2026 after rigorous consultations with Industry experts in closed-door meetings

The move would revise the Financial Instruments and Exchange Act, upgrading the status of Digital Assets and recognizing them as a separate asset class from securities

This happens as Japan warms up to cryptocurrencies and the current administration changes to recognize the investment potential of the asset class

Japan’s Financial Instrument and Exchange Act

Japan’s Financial Instruments and Exchange Act (FIEA) is the bedrock legislation governing securities and financial markets in the country. The Act was created in 1948 as the Securities and Exchange Act and revised in 2007 to adjust the times

The Financial Services Agency administers FIEA, which regulates the entire financial market in Japan, promoting transparency while protecting the interest of investors

The crypto industry in Japan can be described as young and evolving, with the country’s financial sector gradually opening up to the new rave

Leading XRP Community figure Crypto Eri revealed that Japanese Trading company SBI was the first to receive a stablecoin payment license.

The Trading company, which also runs a crypto exchange, is all in with leading stablecoin issuer Circle for cross-border and domestic payments.

Japan is also home to Tokyo-based Metaplanet, a foremost Bitcoin investor holding about 3350 BTC

Away from the private sector, Japanese lawmakers urged financial regulators in the country to establish a national Bitcoin reserve late last year

Despite its strides, Japan is still lagging in crypto adoption in Asia. According to Chainalysis, India topped the 2024 Global Crypto Adoption Index, released in September 2024

India outranked other Asian nations like Indonesia (3rd), Vietnam (5th), Philippines (8th), and Pakistan (9th), with seven of the top 20 countries from Central & Southern Asia and Oceania (CSAO)

The new push by the Japanese administration would likely improve crypto adoption in the country and see the nation climb up the ranks amid its asian counterpart