Japan’s Financial Services Agency (FSA) says it hasn’t yet decided if it will change the country’s laws after the local news outlet Nikkei reported it would look to classify cryptocurrencies as financial products.

“We are currently reviewing the regulatory systems related to crypto assets, but at this point, we have not decided on any specific policies, including whether or not to revise the Financial Instruments and Exchange Act and whether or not to classify crypto assets as ‘financial instruments’ under the Financial Instruments and Exchange Act,” an FSA spokesperson told Cointelegraph on April 1.

It comes after Nikkei reported on March 30, without citing a source, that the financial regulator was planning to submit a bill to parliament to revise the Financial Instruments and Exchange Act as early as next year after having considered the changes through internal study groups,

The outlet reported that the details were still being finalized, but the change would see cryptocurrencies likely put under insider trading laws that currently apply to other financial products, such as stocks, which outlaw trades based on insider information.

Cryptocurrencies are likely to be put in a separate category from securities such as stocks and bonds, according to the report.

If the FSA decides on the change and crypto is regulated under the country’s finance laws , companies offering crypto would have to register with the FSA.

Nikkei reported that the regulator plans to enforce the new rules regardless of whether a company operates in Japan, but it was unclear how the laws would be enforced against overseas entities.

Also unclear was what cryptocurrencies would be regulated and how distinctions would be made between widely traded assets such as Bitcoin

Japan’s regulators and government have recently made a slate of pro-crypto moves.

Related: USDC stablecoin receives approval for use in Japan, says Circle

Earlier this month, the country issued its first license allowing a company to deal with stablecoins to SBI VC Trade, a subsidiary of the local financial conglomerate SBI, which said it was preparing to support Circle’s USDC

The country’s ruling Liberal Democracy Party also moved ahead with reforms to slash the capital gains tax on crypto from 55% to 20% and categorize digital assets as a distinct asset class.

In February, local reports said the FSA was looking to lift a ban on crypto-based exchange-traded funds (ETFs) to align with the policy position of Hong Kong, which approved crypto ETFs for trading in April 2024.

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