- Japan plans to classify crypto under the Financial Instruments and Exchange Act (FIEA).
- The proposed reforms aim to cut crypto tax from 55% to a flat 20% while also paving the way to legalize Bitcoin ETFs.
Japan is moving to reclassify cryptocurrencies under the Financial Instruments and Exchange Act (FIEA), signaling a major shift in its regulatory approach. On June 24, the Financial Services Agency (FSA) released a proposal aiming to treat digital assets as financial products.
If approved, the move will reduce the current progressive crypto tax rate of up to 55% to a flat 20%. This brings parity with equity investments, thus making the crypto sector more attractive to retail and institutional investors. The proposed changes will be discussed at the Financial Services Council meeting on June 25.
Moreover, the FIEA classification would open the door for spot Bitcoin exchange-traded funds (ETFs) in Japan. Currently, legal limitations block the development of such products. However, this revision would remove the barriers and allow regulated crypto ETFs, similar to those approved in the U.S.
Japan’s Crypto Policy Overhaul
In early 2025, the FSA resumed efforts to align Japan’s digital asset rules with those governing securities. As part of this, it convened a closed-door study group to review the crypto landscape. A formal legislative proposal could be submitted by 2026. If passed, crypto markets would face rules on insider trading, market conduct, and investor protection.
Furthermore, the plan supports Japan’s broader policy vision known as the Grand Design and Action Plan for New Capitalism. Under this framework, crypto, NFTs, and Web3 technologies are now national priorities. They are seen as tools to stimulate productivity, innovation, and capital formation across Japan’s economy.
Alongside these reforms, the FSA also plans to update the Payment Services Act. Stablecoin issuers may soon be allowed to hold up to 50% of reserves in low-risk assets. Currently, they must maintain 100% in highly liquid instruments.
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