Regulatory reform could draw new crypto investors and align with global policy trends.
Japan is considering a major shift in its approach to crypto regulation.
A new proposal aims to reclassify crypto assets under the Financial Instruments and Exchange Act. If approved, this could open the door for Bitcoin ETFs in Japan. The change may also introduce a flat 20% tax on crypto gains, replacing the current progressive tax rate.
These changes could reshape investor access and market participation across Japan’s growing digital asset space.
On June 24, Japan’s Financial Services Agency released a document proposing key updates to the country’s crypto framework.
The plan would move crypto assets from the current Payment Services Act to the Financial Instruments and Exchange Act. This would reclassify cryptocurrencies as financial products, placing them under a more robust regulatory umbrella.
Wu Blockchain reported that this move could lift restrictions on Bitcoin ETFs.
The proposed change is set to be reviewed by the Financial System Council on June 25. If adopted, it could allow retail and institutional investors to access Bitcoin through regulated exchange-traded funds.
Currently, crypto profits in Japan fall under progressive taxation, with rates reaching up to 55%. Under the proposed system, crypto gains would be taxed at a flat rate of 20%. This would align the treatment of crypto with that of stocks and mutual funds.
According to materials released by the agency, this shift is aimed at boosting investment and supporting long-term asset formation. The flat tax structure could attract more investors while simplifying tax reporting for crypto traders and holders.
The proposal aligns with broader efforts by Japan’s government to support digital innovation.
Officials see Web3 technologies, including NFTs and crypto, as tools for economic growth and productivity. The initiative is part of the revised 2025 “Grand Design and Action Plan for New Capitalism.”
By classifying crypto as an alternative investment, authorities hope to encourage its adoption while ensuring investor protection. Japan aims to create an ecosystem that enables local communities to showcase cultural assets using digital tools on a global scale.
The push comes as other global regulators warm to digital assets. The policy direction may also reflect the influence of the current U.S. administration, which has adopted a friendlier tone on Bitcoin and blockchain innovation.
Industry observers view the move as a potential turning point. If the proposed reforms go through, Japan could transition from strict oversight to a more supportive stance toward the crypto sector.
