Japan’s FSA weighs treating crypto as securities to pave way for ETFs: report

Japan’s financial watchdog has begun closed-door discussions on revising crypto regulations, including their potential classification as securities.

Japan‘s Financial Services Agency is considering classifying cryptocurrencies as financial products similar to securities, Yahoo Japan reports, citing Japanese news outlets. The agency has begun closed-door discussions with experts to review existing regulations.

The FSA reportedly plans to announce a policy direction by June. It will then seek opinions from the Financial System Council, which will meet in the fall. A legal amendment could be submitted in 2026, though exact timeframe remains to be seen.

If cryptocurrencies are treated as securities, it might make things harder for retail investors, but it could also open the door for spot crypto ETFs in Japan. The details are still being worked out.

The FSA is debating whether to apply existing securities laws under the Financial Instruments and Exchange Act or introduce new rules under the FIEA or the Payment Services Act. The agency is also reviewing whether the regulations would apply to all cryptocurrencies or only major ones like Bitcoin (BTC) and Ethereum (ETH).

In October, a domestic study group released recommendations for crypto ETFs. The group proposed prioritizing Bitcoin and Ethereum, advancing regulatory frameworks, and applying different tax rules for crypto ETFs and spot transactions.

Japan’s push for crypto-friendly regulation could also catch the attention of major venture capital firms. SoftBank, for example, recently backed crypto mining data center Cipher Mining. As part of the deal, SoftBank secured an option to acquire a 300MW undeveloped data center site in Texas owned by Cipher.

News about the potential approval of spot crypto ETFs in Japan comes as SoftBank reports steady financial growth. The company recently announced that its revenues and profits increased across all segments for the nine months ending December 2024, calling it “good and steady progress.” According to its latest earnings report, SoftBank’s net income for FY2024 (Q1-Q3) rose 7.4% to 436.6 billion yen from 406.7 billion yen.