Japan’s 2026 Cryptoasset Regulatory Reform Under the Financial Instruments and Exchange Act

JAMP Compliance Newsletter No. 70 | Part 2: Review of Cryptoasset Regulation

JAMP Financial Solutions Co., Ltd., a member of the JAMP Group, publishes the JAMP Compliance Newsletter for Financial Instruments Business Operators and firms considering registration in Japan. The newsletter provides updates on regulatory developments and other matters relevant to financial business and compliance operations. The company’s confirmed service scope includes registration and compliance support for regulated financial businesses.

This article is the second in a five-part series examining Japan’s 2026 amendments to the Financial Instruments and Exchange Act and the Payment Services Act.

The legislation was submitted to the 221st session of the National Diet on April 10, 2026 and enacted on July 15, 2026. The Financial Services Agency describes the amendments as covering cryptoassets, sustainability disclosure and assurance, startup financing, and unfair trading regulations, among other areas.

The five-part series is organized as follows:
　6. Overview and Policy Context
　7. Review of Cryptoasset Regulation
　8. Corporate Sustainability Disclosure and Assurance
　9. Promoting Funding for Startups
　10. Review of Unfair Trading Regulations for Securities

This second article focuses on the review of Japan’s regulatory framework for cryptoassets.

Reframing Cryptoassets as Financial Instruments

One of the most significant features of the amendments is the transfer of the principal regulatory framework for cryptoassets from the Payment Services Act to the Financial Instruments and Exchange Act.

Under the new framework, the definition of cryptoassets is moved from the Payment Services Act into the Financial Instruments and Exchange Act. The Financial Services Agency has explained that cryptoassets will be positioned under the Act as financial instruments that are distinct from securities.

This distinction is important.

Securities regulated under the Financial Instruments and Exchange Act generally represent legal rights through which investors may receive economic benefits such as dividends or interest. Cryptoassets, by contrast, generally do not themselves represent such legal rights and do not ordinarily provide rights to dividends or distributions of residual assets.

For this reason, the Financial System Council’s Working Group on Cryptoasset Systems concluded that cryptoassets should be regulated under the Financial Instruments and Exchange Act as a category separate from securities.

This treatment should also be distinguished from security tokens.

Japan had already developed a regulatory framework for security tokens through amendments to the Financial Instruments and Exchange Act that took effect in 2020. Where electronically represented tokens embody rights such as shares, corporate bonds, trust beneficiary interests or interests in collective investment schemes, they are incorporated into the securities regulatory framework.

The 2026 reforms address cryptoassets differently: they bring cryptoassets within the Financial Instruments and Exchange Act while continuing to recognize that their legal characteristics differ from those of securities.

Why Bring Cryptoassets Under the Financial Instruments and Exchange Act?

One way to characterize the direction of the reform is that cryptoassets are moving from what was once a relatively open field for experimentation toward a framework of more clearly defined financial responsibility.

Cryptoassets were originally discussed largely in connection with their role as a means of payment. They are now also widely held as investment assets, and the scale and social significance of the market have grown substantially. The Financial Services Agency itself has identified the increasing treatment of cryptoassets as investment assets by domestic and overseas investors as part of the background to the reform. 

Against this background, investor protection cannot be addressed solely on the basis that cryptoassets are a new technology or that investment decisions are made at the investor’s own risk.

The amendments therefore introduce a broader framework of business regulation, information disclosure and other investor-protection measures under the Financial Instruments and Exchange Act. The legislation specifically provides for information publication requirements, regulation of cryptoasset transactions and unfair trading rules relating to cryptoassets. 

Changes to the Business Regulatory Framework

On the business regulation side, the amendments establish cryptoasset trading activities as a new category within Japan’s Financial Instruments Business framework.

The scope is not limited to the purchase, sale or intermediation of cryptoassets. Cryptoasset management and custody-related functions are also addressed within the new regulatory structure.

From an investor-protection perspective, this reflects an effort to clarify which regulated party bears responsibility for activities involving cryptoassets.

The relationship with Investment Management Business and Investment Advisory and Agency Business is also important.

For example, the management of funds that invest in cryptoassets, as well as investment advice relating to cryptoassets, will need to be considered within the broader framework of Financial Instruments Business regulation. This means that firms undertaking such activities may need to consider internal controls and compliance frameworks comparable in discipline to those required for other regulated financial activities.

The structural change itself is notable.

Historically, the main categories of Financial Instruments Business have included Type I Financial Instruments Business, Type II Financial Instruments Business, Investment Advisory and Agency Business, and Investment Management Business. The reform adds a new regulatory category for cryptoasset trading activities.

This can be viewed as a significant change in the regulatory positioning of cryptoassets. Rather than remaining a specialized area at the periphery of the financial system, cryptoassets are being brought more directly within the financial markets regulated by the Financial Instruments and Exchange Act.

This does not, however, mean that the Japanese authorities are endorsing cryptoasset investment. A Diet committee resolution accompanying the legislation expressly calls for public communication to avoid creating the impression that strengthened investor protection amounts to official endorsement of cryptoasset investing. 

Changes to the Information Disclosure Framework

The amendments also establish a differentiated approach to information disclosure.

Where a cryptoasset has an identifiable issuer, the framework places information disclosure responsibilities on that issuer.

Tokens issued by companies or other organizations for fundraising purposes, including certain tokens distributed through an initial exchange offering, are one example of the type of cryptoasset for which an identifiable issuer may exist.

The underlying policy logic has similarities with traditional financial markets: where an issuer raises funds broadly from investors, the issuer should bear responsibility for providing relevant information to those investors.

A different approach is necessary for cryptoassets such as Bitcoin, where it is difficult to identify a specific issuer that can be made responsible for disclosure.

In such cases, the regulatory framework seeks to protect investors by imposing information-provision responsibilities on the cryptoasset trading business that introduces or handles the cryptoasset in the market.

Both approaches reflect a common theme in the reform: identifying the party that should bear responsibility for providing information and protecting investors.

Global Asset Managers Move Further into Tokenization

Beyond Japan, traditional financial institutions have increasingly begun to use blockchain infrastructure whose practical viability was first demonstrated at scale through cryptoasset markets.

One area attracting particular attention is the tokenization of conventional financial products by global asset managers.

Major asset managers including BlackRock and Franklin Templeton have developed tokenized investment products, including tokenized cash-management and government securities products.

For example, Franklin Templeton reported in April 2026 that its BENJI tokenized fund suite represented approximately US$1.98 billion in assets under management. BlackRock has likewise developed its BUIDL institutional digital liquidity fund, which has reached multi-billion-dollar scale. 

These developments illustrate an important transition. Blockchain technology is no longer being used only for cryptoassets themselves. It is increasingly being applied to traditional financial assets and regulated investment products.

JAMP Commentary

The historical significance of cryptoassets may ultimately lie partly in their role in demonstrating that blockchain technology can operate within real economic and financial systems.

The next stage is already emerging: the use of blockchain technology to tokenize financial assets and securities.

If this trend continues, the central question may no longer be simply whether tokenized investment products become more widely available.

A broader question is whether the institutional confidence that supports today’s capital markets can extend to tokenized markets as well.

From that perspective, one possible next point of focus is the behavior of major global asset owners entrusted with substantial pools of long-term savings, including institutions such as Japan’s Government Pension Investment Fund, Norway’s Government Pension Fund Global and GIC.

This remains a hypothesis rather than a prediction. However, participation by major long-term asset owners could represent an important threshold in the development of tokenized markets.

If such investors eventually begin to participate meaningfully in tokenized financial markets, the result could mark the beginning of a broader structural shift in which parts of the capital markets that support long-term savings and asset formation increasingly move on-chain.

Author: JAMP Compliance Team, JAMP Financial Solutions Co., Ltd.

About This Article
This article is an adapted English edition of JAMP Compliance Newsletter No. 70, originally published in Japanese on August 7, 2026. It has been edited and supplemented where necessary to explain Japan-specific legal, regulatory and market context to readers outside Japan. It is therefore not a direct translation of the original Japanese article.

Legal and Translation Notice
Unless otherwise stated, English translations of the names of Japanese legislation, amendments and other terms for which no official English translation has been confirmed are provisional translations prepared for this article. The original Japanese materials should be consulted for authoritative wording.

This article is provided for general informational purposes only and does not constitute legal, regulatory, tax, accounting or investment advice. Laws, regulations, official interpretations and implementation schedules may change. Readers should consult the relevant official Japanese materials and obtain advice from appropriately qualified professionals before taking action.