Cryptoassets, is progress being made towards the transition of the Financial Instruments and Exchange Act? - The Financial Services Agency will present a "conclusion" at the general meeting of the advisory council on the 25th | CoinDesk JAPAN

Next week on June 25, the Financial Advisory Council's general meeting will be held. The main focus is on how the Financial Services Agency will provide guidelines for transitioning the regulation of cryptoassets from the current Payment Services Act to the Financial Instruments and Exchange Act.

On June 20, in an interview with CoinDesk JAPAN, the Financial Services Agency responded that it "cannot comment" on the specific details of the meeting. However, there is a strong view that this topic will become one of the main subjects based on the proposals made by the Liberal Democratic Party and the discussions within the government.

On March 6, 2025, the Liberal Democratic Party's web3 Working Group (WG) announced a new legislative amendment regarding cryptoassets.

The pillar of the proposal is to shift the regulation of cryptoassets from the Payment Services Act to the Financial Instruments and Exchange Act, but its core lies in the fact that, taking into account the characteristics that differ from securities, a unique category of "cryptoassets" is to be newly established under the Financial Instruments and Exchange Act.

Related Article: "Transitioning Cryptoassets to a New Asset Class" - Proposals for the Financial Instruments and Exchange Act, Suggesting Separate Taxation - Opinions and Suggestions Also Welcome: LDP Web3 Working Group

In response to these proposals, the Financial Services Agency is also making concrete considerations.

The discussion paper "Examination of the System Related to Cryptoassets" published by the agency on April 10 of the same year states that issues faced by cryptoassets, such as information disclosure and investment fraud, "are compatible with problems traditionally addressed by the Financial Instruments and Exchange Act" and suggests that "utilizing the mechanisms and enforcement of the Financial Instruments and Exchange Act is one option."

In addition, taking into account that cryptoassets "have characteristics that differ from typical securities such as stocks," a new approach was proposed to classify cryptoassets into two types: "fundraising and business activity type" and "non-fundraising and non-business activity type," and to apply appropriate regulations to each.

[Financial Services Agency Discussion Paper "Verification of Systems Related to Cryptoassets" (Summary)] This clearly indicates the Financial Services Agency's stance aiming for a system design that is more aligned with actual circumstances rather than a uniform regulation, and it is seen as a foundation for discussions at the general meeting.

At the House of Representatives Budget Committee on January 31 of the same year, Finance Minister Kato clearly stated that the schedule for the verification of the cryptoassets system would be "the end of June."

If the transition to the Financial Instruments and Exchange Act is realized, the profits gained from cryptoasset transactions will be subject to a 20% separate taxation similar to stocks. Additionally, the realization of ETFs (Exchange-Traded Funds) also comes into sight.