Japan plans to reduce Crypto Capital Gains Tax from up to 55% to 20% flat, reducing the burden on investors.
Cryptocurrencies may be reclassified under the Financial Products and Exchange Act.
Reclassification enables spot Bitcoin ETFs regulated in Japan.
Japan is pushing to wipe out financial reforms as part of its goal of becoming an “asset management nation.”
Nikkei reports that Financial Services Agency (FSA) is moving forward with proposals on tax reform and reclassifying digital assets, potentially paving the way for cryptocurrency exchange trade funds (ETFs).
Japan aims to reduce crypto tax
Japanese crypto investors are currently facing some of the strictest tax rules in the world. Profits from digital assets can be taxed as well as 55%, much higher than the flat 20% applied to stocks and bonds.
The FSA suggests bringing the crypto under the same 20% bracket and carrying over the losses to investors for three years. The move aims to reduce the burden on traders, boost market activity and rebuild trust.
Japan is moving to classify cryptocurrencies as financial products under the Financial Product Exchange Act. This allows digital assets to match stocks and bonds to provide more stringent surveillance on insider trading and disclosure, creating the pathway for Spot Bitcoin ETFs.
Crypto-up status in Japan
Japan’s crypto market is growing, but domestic transactions are set to double from $66.6 billion in 2022, but retailer adoption has remained weak, with 88% of residents not owning Bitcoin. Heavy taxes and regulatory uncertainty were key barriers.
“In Japan, 88% have never owned Bitcoin.”
“In El Salvador, 28% do not own Bitcoin.”
(New research by @cornellbitcoin club) pic.twitter.com/x0nla9mahm
– Documentation of “@documentingbtc” on July 24, 2025
The FSA hopes that simplified tax rules combined with regulated cryptographic ETFs will ultimately encourage more people to participate.
Japanese stubcoins and new investment products
Based on these reforms, Japan is preparing to expand its digital finance products. Japan, the country, is expected to launch RLUSD by early 2026, with SBI VC Trade as a distributor, probably by fall 2025.
These moves demonstrate Japan’s ambition to expand digital finance while implementing stricter regulations.
FSA Roadmap for 2026
Japan’s FSA will establish a new branch in 2026 to oversee insurance, asset management and digital finance. The reforms aim to follow the insurance scandal, restore trust, strengthen surveillance and support the growth of emerging markets like crypto.
Japan is also tightening its crypto regulations by changing its surveillance from payment laws to investment style regulations. The FSA Working Group is considering stricter disclosures for funding tokens, clear rules for Bitcoin, and stricter measures regarding fraud, taxation and investor protection.
FSA’s bold reforms could turn Japan into a bridge between traditional markets and digital assets
