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Japan is considering tightening regulations on crypto asset transactions by classifying them as financial products akin to stocks, a government source said Tuesday.
The Financial Services Agency is seeking to tighten oversight of crypto asset issuers to protect users amid a rise in fraudulent investment solicitations and rapid market expansion in recent years, according to the source.
Prime Minister Shigeru Ishiba's administration and the ruling Liberal Democratic Party plan to outline the direction of the potential policy change by June, the source said. In Japan, crypto assets are currently regulated under the Payment Services Act.
The financial watchdog and industry groups said crypto asset trading accounts in Japan totaled 11.81 million as of the end of December. The balance of deposits has been rising, reaching around 4.5 trillion yen ($30.11 billion).
If crypto assets come under the Financial Instruments and Exchange Act, which covers securities such as stocks, issuers would be required to disclose detailed information on their corporate status, potentially enhancing user protection.
