Japan proposes new rules: digital assets to be taxed at 20%
Atlas21 (Newsroom)Japan’s FSA aims to reclassify digital assets as financial products, reducing taxation from 55% to 20%.
The Japanese Financial Services Agency (FSA) is preparing a reform of the national regulatory framework for digital assets, with the goal of classifying them as “financial products” under the Financial Instruments and Exchange Act.
According to Asahi Shimbun, the plan includes mandatory disclosure requirements for 105 cryptocurrencies listed on domestic exchanges, including bitcoin and ether, subjecting them to regulations against trading based on insider information.
Currently, Japan applies one of the strictest tax regimes in the world, taxing crypto gains as “miscellaneous income” with rates that can reach 55% for high-income traders. The FSA’s proposal aims to align the taxation of the 105 approved cryptocurrencies with that of stocks, applying a fixed 20% capital gains rate.
If the reform is approved, exchanges would be required to disclose detailed information for each of the 105 listed cryptocurrencies. Required information would include:
- the existence of an identifiable issuer;
- the underlying blockchain technology;
- the asset’s volatility profile.
The FSA intends to submit the new bill to Japan’s main parliamentary session in 2026 for final approval.
One element of the proposal is the introduction of rules against insider trading in the local crypto market. Under the bill, individuals or entities with access to non-public information would be prohibited from buying or selling the affected cryptocurrencies. Insider information would include:
- upcoming listing plans;
- delisting projects;
- financial difficulties of issuers.
Last month, it was reported that the FSA is considering allowing banks to acquire and hold cryptocurrencies for investment purposes. Current regulations effectively prevent banks from holding digital assets due to volatility concerns. The regulator is also exploring the possibility of allowing banking groups to register as licensed exchanges, enabling them to offer trading and custody services directly to clients.
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