Japan’s Financial Services Agency (FSA) has put forward a proposal that could significantly reshape the country’s crypto regulatory landscape.
The plan, released on Monday, seeks to bring crypto assets under the Financial Instruments and Exchange Act, aligning them with traditional securities.
The proposed revision will be reviewed by the Financial System Council on June 25. If approved, it could lay the groundwork for the approval of Bitcoin exchange-traded funds (ETFs) in Japan — an industry milestone that would mark a major step toward mainstream crypto adoption in the country.
One of the most notable changes under the proposal is a shift in how crypto gains are taxed. Currently, crypto earnings are subject to a progressive tax rate that can reach up to 55%. Under the new framework, crypto income would be taxed at a flat 20% rate, mirroring the system applied to stocks and mutual funds.
This tax simplification is expected to encourage more retail and institutional investors to participate in Japan’s crypto markets, which have long been stifled by burdensome tax rules and regulatory ambiguity.
Japan’s push to bring crypto under existing securities legislation comes as other major economies — including the U.S. and EU — move to clarify the legal status of digital assets. The FSA’s proposal also aligns with recent efforts in Japan to attract blockchain innovation and fintech capital while ensuring consumer protections and market integrity.
If the Financial System Council approves the plan, Japan would join a small but growing list of countries enabling regulated access to Bitcoin ETFs and standardized crypto taxation — potentially setting a precedent for Asia-Pacific neighbors.
