Japan Has Not Designated XRP as a Financial Instrument, US Confirmed it as a Digital Commodity, Regulatory Differences May Affect Cross-Border Payments

Gate News Report, March 24 — XRP has not yet been officially classified as a financial instrument in Japan. Crypto Eri, a prominent member of the XRP community, pointed out that recent claims circulating online about XRP receiving a financial instrument status in Japan are false. The Financial Services Agency (FSA) is currently proposing amendments to the Financial Instruments and Exchange Act (FIEA) to reclassify crypto assets before 2027, but these rules have not yet taken effect. The proposed changes aim to strengthen regulation, including disclosure requirements and penalties, in response to the increasing adoption of cryptocurrencies and fraud cases.

Currently, XRP and over 100 other cryptocurrencies are regulated under the Payment Services Act in Japan. The proposed framework would allow banks and traditional financial institutions to invest in crypto assets, marking further integration of digital assets into Japan’s financial system. Legal expert Bill Morgan warned that classifying XRP as a financial product could weaken its utility as a low-cost cross-border payment bridge currency and may increase regulatory friction, impacting liquidity and settlement efficiency.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has classified XRP as a digital commodity rather than a security, placing it alongside cryptocurrencies like Bitcoin, Ethereum, and Solana under the same framework. The SEC stated that these assets derive their value from their functional networks rather than centralized entities, indicating a move away from the Howey Test for securities classification. Coordination between the SEC and the Commodity Futures Trading Commission (CFTC) also provides clearer regulatory guidance for exchange listings, institutional adoption, and expanded use cases.

Analysts note that regulatory differences between Japan and the U.S. highlight the uncertainty in global crypto policy evolution. Investors should monitor regulatory developments closely while observing XRP’s price trends to assess its potential value and limitations in payments, investments, and cross-border settlements.