Japan proposes crypto rule overhaul

• Japan approved a draft law to reshape crypto regulation.
• The proposal would treat digital assets as financial products.
• The changes could strengthen investor protections and market oversight.

Japan's Financial Services Agency has approved a draft amendment that would classify cryptocurrencies as financial products under the country's financial laws.

The proposal would move digital assets under the Financial Instruments and Exchange Act, replacing the current framework under the Payment Services Act.

“There is a need to establish a framework that protects users while supporting innovation,” the Financial Services Agency said.

The changes would introduce tougher disclosure rules, stronger oversight and new measures to combat insider trading in digital asset markets.

The proposal still requires approval from Japan's parliament before it becomes law.

Japan has been updating its crypto regulations following the growth of the digital asset market and increasing participation from institutional investors.

If passed, the reforms would bring Japan's crypto market closer to the rules that already govern stocks and other financial products.