Japan's FSA Considers Classifying Crypto as Securities to Attract ETFs
Japan’s Financial Services Agency (FSA) is considering the potential classification of cryptocurrencies as securities.
As reported by Nikkei, the FSA has begun closed-door discussions to revise crypto regulations, which could see cryptocurrency being considered in a similar vain to traditional securities.
The FSA aims to announce a policy direction by June 2024, followed by consultations with the Financial System Council in the fall. A legal amendment could be proposed as early as 2026, though the exact timeline remains uncertain.
If cryptocurrencies are classified as securities, retail investors might face stricter regulations, potentially limiting their access to certain crypto assets. However, such a classification could pave the way for the introduction of spot crypto exchange-traded funds (ETFs) in Japan, which would provide institutional and retail investors with a regulated and accessible way to gain exposure to digital assets.
The FSA is currently debating whether to apply existing securities laws under the Financial Instruments and Exchange Act (FIEA) or introduce new rules under the FIEA or the Payment Services Act. Additionally, the agency is evaluating whether the regulations should apply to all cryptocurrencies or only major ones like Bitcoin and Ethereum.
This push for clearer crypto regulations follows a Japanese study group which proposed that ETFs for cryptocurrencies should focus on Bitcoin and Ethereum back in October 2024.
Crypto activity in Japan has also been heating up. Just a few days ago, Blockstream, a global leader in Bitcoin-powered financial infrastructure, announced a significant move to deepen its presence in Asia with the opening of a new office in Tokyo.
The company is partnering with Japan’s leading Bitcoin consultancy, Diamond Hands, and Fulgur Ventures, a top investor in Bitcoin-first enterprises, to drive institutional adoption and regulatory advancements.
Last week also saw OSL officially renaming CoinBest K.K. to OSL Japan Limited (OSL Japan) following the successful completion of its acquisition.
This rebranding marks a significant step in OSL Group’s expansion strategy, reinforcing its commitment to Japan’s digital asset market.