Japan’s gearing up to roll out the red carpet for crypto, treating it less like a sideshow and more like a serious player in the financial arena. The country’s Financial Services Agency (FSA) has floated a plan that could shift the way digital assets are seen and taxed.
Image 1: (Source: Ledger Insights)
If this proposal gets across the line, crypto would be treated just like shares and bonds — and not some rogue element sitting out in the cold.
At present, crypto gains in Japan are taxed under a sliding system that can bite hard — some investors fork out up to 55% on their profits. But the new plan would simplify all that, introducing a flat 20% tax rate. That alone is enough to raise eyebrows in a good way.
Rather than being viewed as “miscellaneous income”, crypto would be rebranded as a financial instrument under the Financial Instruments and Exchange Act — the same rulebook that governs traditional investments like stocks. That shift could put crypto on firmer footing and attract a whole new crowd of investors, from the everyman to the institutional bigwigs.
Crypto’s Ticket to the Big League
Japan isn’t just doing this for kicks. The local market is bursting at the seams, with more than 12 million crypto accounts active and a total value north of ¥5 trillion (roughly AUD $50 billion). For many retail investors — especially the younger, tech-savvy bunch — digital currencies have become more appealing than old-school assets like foreign exchange or corporate bonds.
Akihisa Shiozaki, a lawmaker from the ruling Liberal Democratic Party and one of the key voices pushing this forward, has made it clear that Japan’s crypto strategy is part of a broader economic push. Under Prime Minister Kishida’s “New Capitalism” approach, the government hopes to light a fire under private investment and tech-led innovation. And crypto, like it or not, is now a major part of that landscape.
This reclassification wouldn’t just tweak the tax system — it would bring digital assets under stricter rules, including those that crack down on insider trading. That’s not just lip service. It signals a serious effort to tidy up the space and make sure crypto doesn’t remain the Wild West of finance.
Opening the Door to Crypto ETFs
One of the big-ticket items likely to follow is the launch of crypto exchange-traded funds (ETFs). These allow people to invest in cryptocurrencies without having to buy and store the actual coins themselves. In other words, they make crypto investing as easy as buying shares — a blessing for both first-time investors and major institutions.
Japan’s FSA proposes to cut tax on crypto gains from 55% to 20% by reclassifying crypto as financial instruments
This move that could also legalize Bitcoin ETFs and bring digital assets into the financial mainstream.
Japan wants back in the lead on crypto
— Bitcoin.com News (@BTCTN) June 24, 2025
At the moment, nations like the U.S., Australia, and Hong Kong are already laying the groundwork, clearing the path for spot Bitcoin and Ethereum ETFs to hit the ground running. With financial giants like Goldman Sachs and U.S. pension funds jumping on board, Japan doesn’t want to be caught flat-footed.
The proposed rule changes would clear the decks for local companies — such as SBI Holdings and Franklin Templeton — to roll out their own crypto ETFs. These players have been champing at the bit for the green light, and if the FSA plays ball, we could see ETFs hitting the Japanese market before long.
Image 2: (Source: The Crypto Times)
Stablecoins and Tokenised Assets Gaining Ground
But it’s not just about Bitcoin and Ethereum anymore. Japan’s finance scene is also warming up to stablecoins — digital tokens pegged to real-world currencies like the yen or U.S. dollar. Back in April, banking heavyweight SMBC joined forces with Ava Labs, TIS Inc., and Fireblocks to explore the stablecoin frontier. Their goal? To create digital currencies that can also be used to settle trades of tokenised assets like shares, bonds, and property.
Japan’s financial authorities have already granted the first stablecoin handling licence to SBI VC Trade, part of the larger SBI financial group. The firm says it’s working on bringing Circle’s USD Coin (USDC) into play. That’s one more sign Japan isn’t just dipping a toe into digital finance — it’s diving in headfirst.
Eyes on 2025 for the Legal Shake-Up
While these changes are still being ironed out, the writing is on the wall. The FSA is reviewing the fine print with input from legal experts and industry players. Lawmakers are racing against the clock, aiming to tie up the consultations before the curtain falls on the year.
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If all goes to plan, the official shift could kick in by mid‑2025, with a full legal rollout likely to follow in 2026.
The timeline may seem cautious, but in Japan — where the crypto world has seen both booming interest and devastating scandals — it’s a case of once bitten, twice shy. Officials are determined to build a system that’s robust and futureproof, not just a flash in the pan.
