- Japan proposes to regulate crypto assets under the Financial Instruments and Exchange Act.
- The move could legalize Bitcoin ETFs and reduce the tax on crypto gains from up to 55% to a flat 20%.
- This marks a strategic change toward embracing Web3 technologies as part of Japan’s economic agenda.
Japan has signaled a shift in its approach to cryptocurrency, with regulators putting a sweeping proposal on the table that would dramatically cut taxes on crypto gains and clear the path for the nation to launch its own Bitcoin ETFs.
The plan was unveiled today by Japan’s Financial Services Agency (FSA) to bring crypto assets under the country’s Financial Instruments and Exchange Act (FIEA).
If the proposal is approved, crypto assets in Japan, currently regulated under the Payment Services Act, would be officially recognized as “financial products” under the FIEA.
The move aims to align cryptocurrencies more closely with traditional investment vehicles such as stocks and bonds. The proposal will be discussed at the upcoming Financial Services Council meeting on June 25.
Crypto Gains Tax Cut to 20% and Bitcoin ETFs
One of the most notable changes under the new framework is the shift from Japan’s current progressive tax rate on crypto gains. Currently, taxes can reach up to 55%. Under the proposal, crypto gains would be taxed at a flat 20%, similar to stocks. This adjustment could make crypto trading more attractive to retail and institutional investors.
If crypto assets are reclassified under the FIEA, Japan could lift its ban on Bitcoin ETFs. This would allow institutional and retail investors to access Bitcoin through regulated exchange-traded products, significantly expanding market opportunities.
Related: Japan Urged to Adopt National Bitcoin Strategy to Stay Ahead in Global Finance
Government Strategy: Promoting Web3 and Alternative Investments
The regulatory reform is part of Japan’s broader strategy to become an investment-driven economy and promote innovation in the Web3 space. The FSA’s crypto working group highlights the potential of digital assets and blockchain to generate new economic value and help citizens build wealth.
Japan sees crypto as an alternative investment with distinct risks and returns, complementing traditional assets. The recent “Grand Design and Action Plan for New Capitalism 2025” emphasizes Web3 technologies like NFTs as key tools for solving social issues and boosting productivity.
Related: $800 Billion Reasons to Cut: Trump Demands Fed Action as Crypto Markets Eye Bull Run
Joining the Global ETF Race
Japan’s policy shift follows encouraging regulatory signals from the United States, particularly from states like Texas, which have taken a welcoming approach to cryptocurrencies since early 2025.
Observers view this as a major turning point for Japan, moving from cautious regulation to proactive use of digital assets.
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