Japan Financial Services Agency (FSA) has published a new discussion document offering changes to the way cryptocurrencies are regulated in the country. The idea is to divide digital assets into two main categories, which makes the rules easier to apply and more effective to protect investors.
The FSA is currently inviting public comments to the proposal, with suggestions and opinions accepted until May 10, 2025.
Two -level system
The FSA proposal presents a two -level system for digital assets, depending on how tokens are used and how they collect funds:
Type 1 Includes tokens issued for commercial purposes or to collect funds for a project. These include altcoins of new projects that are still developing and can also cover certain utility tokens.
Type 2 covers well -known and decentralized tokens like Bitcoin And Ethereumwhich are not issued to collect funds for a company. These will follow a different set of rules which correspond to their structure and their use.
Type 1 tokens: focus on transparency
For type 1 cryptographic assets, the FSA wants more strict rules around Disclosure and responsibility. The projects that issue these tokens must explain clearly:
- How they plan to use the money collected
- Details on the project itself
- Risks involved for investors
These issuers will also have to follow the existing FSA regulations, including updates and regular disclosure. Once a type 1 token wins a large number of investors, the project can be examined to see if it is eligible safety token regulations.
However, the FSA noted that it can be difficult to deal directly with token transmitters in some cases, especially when no person or clear business is behind the project.
The Financial Services Agency said “With regard to type 1 cryptocurrency, it is very necessary to eliminate the asymmetry of information between transmitters and users concerning the objective of using raised funds and the content of the project, etc.”
Type 2 tokens: surveillance via exchanges
Instead of regulating type 2 tokens directly, the FSA plans to monitor them via crypto exchanges. These exchanges will have to report significant price changes that may have an impact on the market.
The agency also plans to continue to examine and update its approach by examining public comments and how other countries manage cryptographic regulations.
The document covers a wide range of financial subjects, such as disclosure rules, business practices, market entry requirements and the means of preventing the offense of initiate. However, this does not explain how crypto should be taxed, leaving this problem for another time.
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Japan’s changing attitude towards crypto
Japan is known to take a cautious position on cryptocurrencies, but that seems to change. In a major change, regulators now plan to raise the ban on Crypto ETF, a decision that has aroused excitation in the cryptographic community.
For the future, the FSA also plans to revise the law on financial instruments and the exchange by 2026. By virtue of the revised law, cryptocurrencies would no longer be considered as payment tools. Instead, they would be classified as a new type of financial product, giving them more formal recognition in the financial system.
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Faq
Once a type 1 project has won a large number of investors, projects will be assessed to check if they could be subject to safety tokens regulations.
The FSA will regulate type 2 cryptographic assets via crypto exchanges and also require that platforms signal major price fluctuations that can have an impact on the market.
