- Japan plans to slash crypto tax from 55% to 20% under proposed FSA regulatory reforms.
- Bitcoin ETFs may launch in Japan as crypto shifts under Financial Instruments law.
- Japan’s crypto overhaul supports Web3 growth and aligns with global investment standards.
The Financial Services Agency (FSA) of Japan has presented a significant proposal to reclassify crypto assets in the Financial Instruments and Exchange Act (FIEA). The move will help regulate cryptocurrencies as securities and may pave the way for Bitcoin exchange-traded funds (ETFs) in the country. The move is also aimed at reducing the taxation rate on crypto gains, from a high of 55% to a flat rate of 20%, thereby aligning it with the capital gains tax on stocks.
The proposal was announced on June 24 and will be discussed at the next meeting of the Financial System Council on June 25. Japan seeks to officially acknowledge digital currencies as financial products by transferring crypto assets out of the existing Payment Services Act under the FIEA. This reclassification will provide investor protections similar to those of traditional securities, including rules on market transparency and trading practices.
Tax Reform to Align Crypto with Traditional Investments
One of the most remarkable features of the FSA proposal is the cryptocurrency tax reform. According to experts, this would promote domestic investment by reducing the tax burden on both retail and institutional investors.
Reports indicate that Japan’s stringent crypto tax regime has driven some companies to relocate capital abroad. For example, Tokyo-based crypto firm Metaplanet recently allocated $5 billion to its U.S. subsidiary for Bitcoin acquisitions. Analysts view the tax reform as a potential factor that could encourage firms like Metaplanet to scale their operations within Japan instead of overseas.
This tax change also aligns with Japan’s broader economic strategy to transition into an investment-driven economy. It aligns with the state policy of “New Capitalism”, which also emphasizes the adoption of digital assets and Web3 infrastructure. Regulators are also working towards creating an environment in which crypto assets become accepted as alternative investments, alongside stocks and bonds.
Regulatory Shift Reflects Global Trends and Domestic Goals
Japan’s proposal aligns with the global trend toward clearer cryptocurrency regulations, inspired by other countries such as the United States. The early 2024 approval of Bitcoin ETFs by the U.S. Securities and Exchange Commission set the stage for institutional investments by firms such as BlackRock and Fidelity. Similarly, if Japan allows Bitcoin ETFs, it would provide a regulated path for investors to diversify their exposure to cryptocurrencies.
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The FSA’s proposal aligns with domestic efforts to boost digital innovation and economic revitalization. The revised “Grand Design and Action Plan for New Capitalism,” approved in June 2025, emphasizes Web3 and crypto assets as key drivers for regional development and productivity improvements. The government envisions digital assets contributing to a diversified investment portfolio and sees NFTs and decentralized finance as growth areas.
Should it be implemented, Japan would mark a shift in its regulatory overhaul. The country would shift its regulatory approach to support the development of the crypto market and encourage institutional participation. This may contribute to increased domestic adoption, enhanced investment opportunities, and greater capability for Japan to establish itself as a global crypto hub.
