Japan’s financial regulators are planning to reclassify Ripple’s XRP as a regulated financial product under the country’s Financial Instruments and Exchange Act (FIEA) by the second quarter of 2026, signaling a major shift in how the token is treated within the nation’s legal framework for digital assets.
Under current Japanese law, most digital assets are regulated as “crypto assets” under the Payment Services Act, but the planned update would place XRP in the same category as traditional financial products such as stocks and bonds, subjecting it to enhanced disclosure requirements, licensing rules and stricter anti-money-laundering compliance. This is intended to provide clearer investor protections and reduce legal uncertainty for exchanges, institutions and retail participants.
The move comes amid broader regulatory reforms intended to strengthen Japan’s digital asset ecosystem and align it more closely with established financial markets. Regulators expect the reclassification of XRP and other major cryptoassets under the FIEA to encourage institutional adoption and deepen market participation, while also giving Japanese authorities more robust oversight tools in areas like custody, risk reporting and market conduct.
While Japan has not yet formally enacted the change, the target timeline for implementation is the second quarter of 2026, giving market participants time to prepare for compliance with the updated regulatory regime. Observers say the shift could set an important precedent for how other jurisdictions treat major digital assets like XRP within traditional financial law.
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