Japan Plans Major Crypto Reform with New Tax Rules and ETF Access

Japan is preparing to dramatically reshape its cryptocurrency regulations, with officials drafting a proposal that would reclassify digital assets and streamline their tax treatment.

The initiative, spearheaded by the Financial Services Agency (FSA), could pave the way for exchange-traded funds (ETFs) based on cryptocurrencies and reduce the tax burden on crypto investors.

The draft reform suggests that cryptocurrencies be treated similarly to traditional securities under Japan’s Financial Instruments and Exchange Act. This legal adjustment would mark a significant shift in how the country approaches digital assets, potentially unlocking regulated crypto investment products for the first time.

A key component of the plan includes replacing the current progressive tax model—which subjects crypto profits to rates as high as 55%—with a standardized 20% capital gains tax, mirroring stock investments. If implemented, this could encourage more retail and institutional involvement in Japan’s growing crypto market.

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The proposal comes amid rapid adoption of digital assets domestically. As of early 2025, over 12 million Japanese users held active crypto accounts, and assets on domestic platforms topped ¥5 trillion (around $34 billion). The FSA noted that crypto ownership in Japan has now outpaced some conventional asset classes, especially among younger, tech-savvy investors.

At the same time, the global expansion of institutional interest in crypto—particularly through U.S.-listed Bitcoin ETFs—has not gone unnoticed in Japan. With more than a thousand global institutions now participating, regulators are looking to bring similar innovations to the Japanese financial landscape.

The country is also testing the waters with stablecoins. A partnership between major financial institutions like Sumitomo Mitsui and crypto firms including Ava Labs and Fireblocks is exploring the issuance of stablecoins tied to the yen and the U.S. dollar. These coins could be used to settle tokenized assets ranging from stocks to real estate.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.