Key Notes
- The FSA has also outlined a regulatory framework to facilitate Bitcoin ETF listings, aiming to boost market participation and investor confidence.
- It suggests reclassifying cryptocurrencies as "financial products" under the Financial Instruments and Exchange Act.
- The FSA reports that over 12 million active crypto accounts in Japan hold assets worth more than 5 trillion Japanese Yen (~$34 billion).
In a massive development, the top Japanese regulator, Financial Services Agency (FSA), has proposed fresh crypto reforms offering a clear path to the local crypto industry.
It has also proposed a flat 20% crypto tax, replacing the current arbitrary range of 15% to 55%.
The FSA expects Bitcoin ETF approval soon, providing investors with a regulated way to gain exposure to the asset class. Meanwhile, Japanese public company Metaplanet is rapidly increasing its Bitcoin BTC $105 906 24h volatility: 2.1% Market cap: $2.10 T Vol. 24h: $39.47 B holdings, now totaling 11,111 BTC.
Japan Needs Crypto Tax Reforms
Although Japan is among the most crypto-friendly nations, it still needs reforms in crypto taxation along with growing market participation.
Currently, taxes on crypto gains in Japan can be as high as 55%. However, the FSA has proposed lowering them to a flat 20%, aligning crypto taxes with those on stock market gains in the country.
According to the latest report from Japanese local media, the FSA proposal will be discussed at the Financial System Council meeting on June 25.
Currently, crypto assets in Japan are regulated under the Payment Services Act, which classifies them mainly as digital payment methods. The proposed change to the Financial Instruments and Exchange Act (FIEA) would reclassify cryptocurrencies as “financial products.”
This transition would introduce stronger investor protections, including the regulatory framework required to facilitate the listing of Bitcoin ETFs on Japanese exchanges.
As a result, financial regulator FSA seeks to enhance investor protection and market transparency while promoting greater participation from both institutional and retail investors, according to local media reports.
Crypto Ownership Surpasses Traditional Products
The FSA highlighted in its proposal that crypto ownership now exceeds participation in certain traditional financial products, such as foreign exchange and corporate bonds, especially among tech-savvy retail investors.
This shift aligns with the growing interest in cryptocurrencies as a legitimate investment asset. As of January 2025, over 12 million active domestic crypto accounts were reported, holding assets on platforms valued at more than 5 trillion Japanese yen (approximately $34 billion), according to the FSA.
Earlier this year in April, Sumitomo Mitsui Financial Group (SMBC), TIS Inc., Ava Labs, and Fireblocks signed a Memorandum of Understanding to advance the commercialization of stablecoins in Japan . The partnership aims to issue stablecoins pegged to the US dollar and the Japanese yen.
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