Policy Changes Could Transform Investment Landscape
Japan's Financial Services Agency proposed major regulatory reforms in June 2025. Cointelegraph reports the agency wants to reclassify cryptocurrencies as financial products under the Financial Instruments and Exchange Act. This change would enable crypto exchange‑traded funds and reduce tax rates.
The proposal includes cutting crypto taxes from progressive rates up to 55% to a flat 20%. This matches the tax treatment of stocks and bonds. More than 12 million domestic crypto accounts were active as of January 2025. Assets held on platforms exceeded 5 trillion yen.
The Block notes the agency plans to request tax code revisions for the 2026 fiscal year. Industry firms also requested a three‑year loss carry‑forward option. The agency expects to approve Japan's first domestically regulated yen‑pegged stablecoin this fall.
Japan Positions for Global Crypto Leadership
Takaichi previously supported crypto innovation during her time as minister for internal affairs and communications. In 2019, she backed the legality of cryptocurrency donations to politicians. She stated these donations were not subject to the same disclosure requirements as cash or securities.
The regulatory framework builds on former Prime Minister Fumio Kishida's New Capitalism strategy. Japan aims to position itself as an investment‑led economy. The proposed reforms would place Japan among the world's most crypto‑friendly major economies.
As we reported in our Global Bitcoin Policy Index analysis in May 2025, effective Bitcoin policies share common attributes. These include clear legal classification and proportionate compliance requirements. Japan's approach aligns with this framework by providing regulatory clarity while reducing tax burdens.
However, implementation faces potential political obstacles. Japan's conservative financial establishment has historically been skeptical of digital assets. The reforms also require legislative approval in the 2026 Diet session. Success depends on balancing innovation with investor protection concerns.