Japan plans to classify XRP tokens as regulated financial products before Q2 2026

According to Finance Feeds, the Financial Services Agency of Japan plans to officially reclassify Ripple's XRP as a "regulated financial product" before the second quarter of 2026, moving it out of the "crypto asset" category under the Payment Services Act and into the more stringent regulatory framework of the Financial Instruments and Exchange Act.

This move aims to align the legal status of XRP with its significant institutional application scale in Japan. XRP has become one of the pillars of the country's banking and remittance infrastructure. After reclassification, XRP will gain an "investment-grade" status equivalent to traditional stocks and bonds, which is expected to attract more institutional capital and provide a regulatory precedent for other major digital assets. The new regulations will require exchanges and liquidity providers to fully disclose asset volatility, technical characteristics, and issuer relationships, and will explicitly prohibit insider trading and market manipulation to enhance investor protection.