Japan’s regulators have finally taken action. Reports have come in that they have approved a bill to officially reclassify crypto assets as financial instruments. Crypto, which up to now has been handled under the payment and settlement laws, will now be brought under the Financial Instruments and Exchange Act. For the market, I believe this is quite a major turning point.

As for what will change, first, a ban on insider trading will be introduced in the crypto market. Regulations that were standard in the stock market will finally be applied to crypto assets as well. It will prevent trading based on undisclosed (unpublished) insider information, thereby increasing market fairness. At the same time, penalties for exchanges that are not registered will also be raised. In other words, pressure to weed out illegal operators will intensify.

On the issuer side as well, annual disclosure will be required. This has been standard in traditional finance, but it has not been the case in crypto until now. Going forward, projects will need to publish information properly every year. It likely means we have entered an era where transparency is demanded.

Behind this is Japan’s determination to push crypto toward institutional adoption. There are plans to introduce crypto ETFs by 2028, and the tax rate is also moving in the direction of being reduced from the current 20%. Major financial groups such as Nomura and SBI are also trying to make a serious, full-scale entry into this space. In other words, Japan is seeking to incorporate crypto not just as a speculative target, but as a legitimate financial product.

This kind of regulatory development may make the market feel constrained in the short term. But in the long run, it should accelerate the entry of institutional investors. With a structured system in place, large capital can flow in with confidence. Japan’s crypto market is trying to move on to the next stage. At Gate.io as well, it is expected that more products and information will be offered that reflect these regulatory developments.