tl;dr
Japan is considering changing the classification of digital assets from payment methods to financial products, increasing regulatory oversight for issuers due to the growth of the digital asset market and investment scams. The proposed change would place digital assets under the Financial Instrument...
Japan is considering changing the classification of digital assets from payment methods to financial products, aiming to increase regulatory oversight for issuers. This move is prompted by the growing digital asset market, which has reached roughly JPY 4.5 trillion (US$30.11 billion) in recent years. The proposed change would place digital assets under the Financial Instruments and Exchange Act, similar to company shares, leading to greater disclosure of issuers’ identities and corporate status.
Digital assets in Japan currently fall under the Payment Services Act, classifying them more as a form of payment than a financial instrument or investment. Despite existing registration requirements, this classification has led to an increasing number of investment frauds and scams. The Financial Services Agency (FSA) aims to combat fraudulent activities and provide better consumer protection through this reclassification.
Contrary to legal definitions in other major trading markets like the United States, Japan does not consider digital/crypto assets as legal tender. The FSA reported an increasing number of investment frauds and scams in Japan, with at least 11.81 crypto asset trading accounts, representing almost 10% of the country’s population.
One example of investment fraud in Japan involved a Tokyo-based company called VISION, which sold shares in rental "USB devices" and then began paying investors in a cryptocoin called "V Cash," ultimately causing losses of over $1 million to over 3,000 people. Despite the enhanced registration requirements, scammers continue to find ways to deceive individuals, making it crucial to combat fraudulent schemes in the digital asset market.
Meanwhile, Ghana has launched its central bank digital currency (CBDC), and the Bank for International Settlements (BIS) believes that CBDCs will help counteract stablecoins. In Europe, the digital euro project is expanding, while the U.S. remains against adopting a central bank digital currency.