Japan’s Financial Services Agency is engineering a pivotal change, seeking to relocate crypto asset regulation from payments legislation to the strictures of securities law. This reflects the evolving nature of how these assets are utilized.
The agency released a formal report outlining this intention, prepared by a working group of the Financial System Council. The document examines the current regulatory status across the crypto sector.
Technically, the change means the legal basis would move from the Payment Services Act to the Financial Instruments and Exchange Act. The FIEA governs the traditional investment landscape, focusing on transparency and market integrity.
Driving this shift is the observation that crypto assets are now primarily investment vehicles. The report states that both domestic and international use cases necessitate a regulatory focus on user protection through financial product rules.
One practical impact will be on initial exchange offerings. Under the FIEA, IEOs would face much stricter data disclosure mandates to protect participants.
The report draws a direct parallel, stating user crypto transactions are akin to securities trading. It concludes that for sales of new crypto assets, ensuring timely information disclosure is a paramount concern for regulators.
