Key Takeaways
What’s Behind Japan’s Crypto Tax Plans?
To stay competitive in the global crypto space, as requested by the Japan Business Association.
What is the overarching impact of the tax credits?
It could potentially boost crypto adoption in Japan even further, following the momentum seen in 2025 after the revision of stablecoin rules.
Japan will move forward with initial plans to classify crypto assets, including: Bitcoin [BTC] And Ethereum [ETH]as “financial products” comparable to shares.
According to a local Asahi PublicationBased on sources familiar with the Financial Services Agency, the regulator has reportedly requested a reduction in tax rates to match those of shares.
In perspective, crypto has been legal in Japan since 2017 and is classified as a “settlement asset” or payment instrument under the Payment Services Act (PSA).
However, it has attracted a high tax rate of up to 55%.
Now the reclassification under the Financial Instruments and Exchange Act would yield only 20%, comparable to the tax rate on capital gains linked to equities.
The move will affect 105 crypto assets, including BTC and ETH, and exchanges will be required to disclose information about these assets.
Japan’s crypto overhaul and impact
Notably, the proposed tax reform is expected to be considered in 2026, which would pave the way for relief and potentially accelerate cryptocurrency adoption in Japan.
The above proposals, especially those involving tax cuts, were the first floated in August to pave the way for the adoption of crypto ETFs.
To limit insider trading and enhance investor protection, similar to that in the securities sector, the FSA suggested strict insider trading rules for the crypto sector, especially for players like Metaplanet.
The tax plans also followed reform requests by the Japan Business Association (JBA) to ensure the country remains competitive in the global Web3 space.
Pressure on ETFs is increasing in the major markets
The United States approved spot BTC and ETH ETFs in 2024. Other regions moved soon after, with Hong Kong and Britain progressing the launch. Japan could adopt its own ETF framework by 2027.
And the urgency makes sense. Japan saw the highest crypto growth in the APAC region in 2025, recording a 120% increase in on-chain value received, according to Chain analysis.
Source: Chain analysis
According to Chainalysis, the regulatory overhaul was a key driver of renewed crypto momentum in Japan, especially in the stablecoin space.
Given the reclassification and associated tax relief for crypto assets and expected ETFs, the momentum may continue.