Japan moves to reclassify crypto as a financial product in rule overhaul
Japan's Financial Services Agency (FSA) is preparing a sweeping overhaul of crypto rules that would legally reclassify cryptocurrencies from a payment method to a "financial product." The move — driven in part by a fourfold increase in crypto accounts over the past five years — is intended to strengthen investor protections and bring digital-asset oversight closer to traditional financial markets. If enacted, the amendment could subject exchanges and token services to stricter disclosure, custody and supervision standards, narrowing gaps between crypto and conventional finance. Regulators and market participants say the change may increase compliance costs but also improve consumer trust and market stability, potentially attracting more institutional participation while aligning Japan with global regulatory trends.