Japan Classifies XRP as Financial Asset amid Ripple’s Vision to Bridge Crypto-TradFi Gap

Japan’s cabinet approves a bill to classify XRP and other crypto assets as financial products under the Financial Instruments and Exchange Act (FIEA) on Friday. This comes as the Financial Services Agency (FSA) aims to regulate crypto assets as financial instruments, shifting from the Payment Services Act (PSA).

Japan Appoves Crypto Bill to Classify XRP as Financial Instrument under FIEA

Nikkei reported on April 10 that Japan’s government has greenlighted a bill to amend the Financial Instruments and Exchange Act at a cabinet meeting. If passed, the legislation is expected to take effect as early as fiscal 2027.

The bill will classify XRP and other crypto assets as financial instruments. It also tightens oversight to prohibit insider trading and transactions based on non-public information. It will also require crypto issuers to disclose relevant information once a year, boosting the crypto market environment.

Crypto assets were earlier regulated by the Financial Services Agency (FSA) under the Payment Services Act. However, domestic and international investors have already recognized cryptocurrencies as investment assets.

The registered businesses will also change from ‘crypto asset exchange business’ to ‘crypto asset trading business.’ The FSA is to strengthen penalties, from a prison sentence to a fine of up to 10 million.

“We will expand the supply of growth capital in response to changes in financial and capital markets, and ensure fairness and transparency in the market and investor protection,” said Finance Minister Satsuki Katayama.

Classification of Crypto Assets by Japan’s FSA

Japan has witnessed massive crypto adoption, with accounts at crypto exchanges surpassing 12 million and user deposits reaching over 5 trillion yen. Moreover, more than 1,200 institutional investors are pouring money into spot Bitcoin ETFs.

The FSA to classify crypto assets issued as a means of fundraising, with proceeds used for projects, events, community activities, etc., as Type 1 under the FIEA.

In contrast, Type 2 crypto assets including Bitcoin, Ethereum, XRP, meme coins, etc. Notably, the US SEC and CFTC also recently classified XRP and other crypto assets as non-securities. It helps boost institutional adoption of crypto assets, with rising tradFi interest.

Many non-fungible tokens (NFTs) do not qualify as cryptoassets under the PSA. However, the FSA is considering keeping NFTs under the PSA. Moreover, stablecoin are also currently considered to regulate the the PSA, as they are not currently traded as investment targets.

Ripple CEO Brad Garlinhouse also noted XRP and RLUSD stablecoin helping bridge the gap between tradFi and the crypto industry. Japan holds strategic importance for Ripple and XRP, with longstanding ties through partners like SBI Holdings.

Several Ripple executives attended the XRP Tokyo 2026 conference, hosted by XRPL Japan. The event focused on XRP’s rapid expansion into financial areas such as adoption by institutional investors, RWA tokenization, and DeFi.

XRP Price Steady amid Options Expiry and CPI Inflation

XRP price is currently trading at $1.33, with a 24-hour low and high of $1.32 and $1.37, respectively. Trading volume has decreased as traders brace for crypto options expiry and US CPI inflation data.

Spot XRP ETFs have pulled in over $41 million in net inflows in 2026. This happened even as XRP price remains nearly 40% down over the past year, highlighting confidence among whales.

The derivatives market showed buying in the last few hours, as per CoinGlass data. At the time of writing, the total XRP futures open interest jumped almost 2% to $2.43 in 24 hours. The 4-hour XRP futures OI climbed 0.52%, but is down 0.18% and 0.53% on CME and Binance, respectively.