Japan Moves Crypto Overhaul Forward: Proposed 20% Tax Rate and a Route to Domestic ETFs
Japan is pressing ahead with changes to its cryptocurrency rulebook, moving toward a regime that treats digital assets more like mainstream financial products. According to CoinDesk, a newly passed bill would bring cryptocurrencies under the Financial Instruments and Exchange Act, placing them closer to the regulatory framework used for stocks and other securities. If the House of Councillors approves the measures, implementation would roll out in stages from next year.
A central pillar is tax reform. The proposal would cut the tax rate on crypto gains to 20%, down from today's top individual rate that can reach 55%—a gap that has long made crypto taxation far less favorable than stocks and bonds. Under current planning, the revised tax rules are expected to take effect in 2028. If enacted, the shift would align crypto taxation more closely with securities markets and could lower the entry hurdle for both institutional and retail investors. A Financial Services Agency official said the aim is to provide clearer rules for digital-asset trading and improve market functioning, rather than to endorse crypto assets.
The bill also lays groundwork for crypto ETFs in Japan. Bloomberg, citing Japan Exchange Group, reported that if the legal framework continues to progress, cryptoasset-linked ETFs could begin trading as early as next year. That would allow Japanese investors to gain exposure to assets such as Bitcoin and Ethereum through regulated securities products—something not previously available in the domestic market.
The initiative builds on reforms adopted in April, when Japan amended its rules to reclassify crypto assets as financial instruments and add new limits on insider trading. The latest package expands the agenda to include tax treatment and product listing pathways.
Enforcement is set to tighten alongside product expansion. The new framework would strengthen disclosure requirements for crypto issuers and raise penalties for unlicensed exchanges, aiming to widen the scope for compliant offerings while increasing regulatory pressure on noncompliant operators. Market participants say the direction signals greater certainty. A representative from QCP Group, a Singapore-based market maker operating in Japan, said the legislation delivers long-awaited clarity for local participants.
Japanese megabanks are also moving on stablecoin infrastructure. MUFG, Sumitomo Mitsui Banking Corporation, and Mizuho Bank said this week they plan to begin live transactions for a jointly developed stablecoin in fiscal 2026.
Stablecoins, however, are expected to remain regulated under Japan's existing payment services framework and would not fall under the proposed securities-style regime. The more direct beneficiaries of the new legislation are likely to be cryptoassets such as Bitcoin and Ethereum, through improved ETF access and broader institutional participation.
