Japan plans major crypto reclassification and tax cuts: report
Japan’s Financial Services Agency (FSA) has reportedly finalized plans to reclassify 105 cryptocurrencies as financial products — a move that could significantly reshape how digital assets are regulated in the country. Alongside the reclassification, the agency is also pushing to drastically reduce taxes on crypto gains, lowering the maximum rate from 55% to 20%, bringing it in line with stock investment taxes.
According to a report from Asahi, the reclassification would place selected cryptocurrencies, including bitcoin and ether, under the Financial Instruments and Exchange Act. This would require exchanges to provide detailed disclosures for each listed asset, such as:
• whether the token has an issuer,
• the blockchain network it’s built on,
• and its price volatility.
The FSA also intends to introduce new insider-trading safeguards. These rules could prohibit token issuers and executives at crypto exchanges from trading assets based on confidential information — such as upcoming listing schedules.
These regulatory updates are expected to be formally submitted as amendments during Japan’s ordinary Diet session in 2026.
A significant tax overhaul
As part of the broader shift toward treating these 105 cryptocurrencies like traditional financial instruments, Japanese authorities want to cut the tax rate on crypto income from the current maximum of 55% down to 20%. This would put crypto gains on par with stock investment taxes. The proposed tax changes are expected to be evaluated in the next fiscal year, according to Asahi.
Japan’s push toward a Web3 future
Japan, once highly cautious toward crypto following the infamous Mt. Gox collapse, has spent the past few years reshaping its approach in an effort to position itself as a Web3 innovation hub.
Just last month, reports indicated the FSA is exploring ways to allow domestic banks to trade cryptocurrencies similarly to stocks and government bonds. The agency is also backing a yen-pegged stablecoin initiative. Japan’s first locally issued stablecoin, JPYC, officially launched on Oct. 27th.
