Japan advances bill to regulate Bitcoin like securities, cut crypto tax to 20%

Japan’s lower house has passed a sweeping crypto bill that would place Bitcoin and other digital assets under the same legal framework as traditional securities. The proposal would reduce the top tax rate on crypto gains from 55% to a flat 20%, aligning treatment with stocks and bonds, while laying the groundwork for regulated crypto ETFs and expanded institutional involvement. Under the bill, cryptocurrencies would be classified as financial instruments under Japan’s Financial Instruments and Exchange Act (FIEA), applying securities-style rules to the crypto market, including insider-trading restrictions. Penalties for unregistered crypto sellers would also increase sharply, with the maximum prison term rising from 3 years to 10 years. Japan Exchange Group has said crypto-linked ETFs could begin listing as early as next year once the regulatory framework is finalized. The legislation now moves to the upper house; if enacted, it would represent one of the most significant crypto regulatory overhauls in a major economy, combining lower taxes with ETF access and deeper integration into the traditional financial system.