Haciyev Reşit 
A critical development closely affecting the cryptocurrency market has emerged from Japan. Japan’s Financial Services Agency (FSA) plans to officially reclassify Ripple’s XRP token as a “regulated financial product” before the second quarter of 2026. This move aims to eliminate the mismatch between XRP’s actual use cases in Japan and its current legal status.
XRP to Exit Cryptocurrency Asset Status
At present, XRP is classified as a “crypto asset” under Japan’s Payment Services Act. With the planned change by the FSA, XRP will be removed from this category and brought under the scope of the Financial Instruments and Exchange Act (FIEA). This would grant XRP a status similar to traditional financial products that are subject to stricter regulations.
Officials emphasize that the primary reason for this change is the gap between XRP’s legal definition and its real-world usage in Japan. XRP is already actively used within Japan’s banking system and international money transfer infrastructure. Many financial institutions utilize Ripple’s technology for cross-border payments.
A regulatory source commented on the matter as follows:
“XRP’s widespread institutional use in Japan has gone beyond the scope of the existing crypto asset definition. The new classification will place this reality on a legal foundation.”
A New Door for Institutional Investors
Following the reclassification, XRP would gain the status of an investable financial instrument, similar to stocks and bonds. This is expected to make it easier for institutional investors to access XRP and could encourage new capital inflows. According to experts, this step may further accelerate XRP’s institutional adoption in Japan. Under the new regulatory framework, cryptocurrency exchanges and liquidity providers will be required to provide more detailed disclosures regarding:
- XRP’s volatility
- Its technical structure
- Its relationship with the issuer
In addition, insider trading and market manipulation will be explicitly prohibited, with the goal of strengthening investor protection.
A Potential Precedent for Global Markets
Experts note that Japan’s move could serve as a precedent not only for XRP but also for other major digital assets. Classifying XRP as a regulated financial product may influence how regulatory authorities in other countries approach cryptocurrencies. The implementation of a clearer, more comprehensive, and predictable regulatory framework could positively impact institutional investors’ perception of the crypto market. Such steps are expected to contribute to long-term market confidence and accelerate the integration of crypto assets into the traditional financial system.
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