- Japan’s lower house approval moves the crypto bill closer to a final parliament vote.
- Tax on crypto gains would fall from 55% to 20% once reforms begin in 2028.
- Japan Exchange Group expects crypto-linked ETFs to start listing next year.
Japan is moving closer to placing digital assets under rules used for traditional financial markets after the lower house approved a broad crypto reform bill on Thursday. The proposal would classify crypto assets as financial instruments, bringing trading, disclosure, and enforcement standards closer to those applied to stocks.
The Crypto Bill is expected to move through the upper house before taking effect next year. Its biggest change for investors is tax treatment, with crypto gains set to move from a maximum 55% rate to a flat 20% rate from 2028.
Crypto Bill Brings Digital Assets Under Securities Rules
According to reports, the bill would place crypto assets under the Financial Instruments and Exchange Act, giving regulators a clearer basis for supervising trading activity. Officials have linked the move to rising interest from financial institutions and retail investors.
Masato Yoshizawa, from the Financial Services Agency’s policy and markets bureau, said the goal is to build a sound trading environment. He added that regulators were seeking healthy market growth, not direct endorsement of crypto assets.
The proposed framework would also tighten rules against insider trading. Penalties for crypto insider trading would be aligned with those used for listed securities, giving authorities stronger enforcement tools.
Japan also plans to raise the maximum prison sentence for unregistered crypto sellers from three years to 10 years. Earlier amendments introduced annual reporting duties and higher penalties for exchanges operating without licenses.
20% Tax Rate Could Expand Investor Access To Crypto
For investors, the clearest impact is tax reform. Crypto gains currently face a maximum tax rate of 55%, while stocks and bonds are taxed at 20%. Under the Crypto Bill, that gap would narrow from 2028.
Koichi Kano, Japan head at QCP Group, said the new approach brings clarity after years of mixed interpretations across the market. The reform could also open the door to regulated crypto exchange-traded funds.
Bloomberg reported that Japan Exchange Group expects crypto-linked ETFs could begin listing as early as next year if the legal framework advances. That would give local investors access to products already used in other major markets.
Bitcoin and Ether would be the main assets positioned for regulated ETF products under the planned framework.
ETF Hopes Rise As Stablecoin Projects Gain Momentum
Notably, the Crypto Stocks approach is advancing as major banks build digital asset infrastructure. MUFG Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank plan live stablecoin transactions during fiscal 2026.
Stablecoins will remain under Japan’s payment services framework, separate from the proposed securities regime. For Bitcoin and Ether, however, the new rules could support stricter oversight, clearer taxation, and wider institutional participation.
For now, the Crypto Stocks shift marks a major regulatory turn for Japan’s digital asset market.
Related: Japan’s Largest Banks Target Joint Stablecoin Launch by 2027
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