Japan Wants To Slash Its Crypto Taxes By 32%

"Japan's Financial Services Agency (FSA) has reportedly finalized a sweeping plan to reclassify 105 cryptocurrencies - including bitcoin - as financial products under the Financial Instruments and Exchange Act, marking one of the country's most significant regulatory shifts since the Mt. Gox era. According to outlet , the move would subject these 105 assets to the same disclosure, reporting, and market surveillance standards used in Japan's traditional securities markets."

"Exchanges listing the assets would have to publish detailed information on each token, including whether it has an issuer, the underlying blockchain architecture, and the level of price volatility. The FSA also plans to introduce explicit insider trading rules for the crypto sector for the first time. Issuers, exchange executives, and related parties would be prohibited from trading tokens using non-public information - a category that includes planned listings, delistings, bankruptcies, or other material events."

"Alongside the reclassification, the FSA is pushing to slash the country's notoriously high crypto tax rate. Currently, Japanese residents must declare crypto profits as "miscellaneous income," which can push the effective tax burden to 55% for high-earning traders. The agency wants to bring crypto taxation in line with equities - a flat 20% rate - for profits generated from the newly recognized financial products. The proposal will be reviewed during next fiscal year's tax reform cycle and could take effect as early as 2026."

Japan plans to reclassify 105 cryptocurrencies, including bitcoin, as financial products under the Financial Instruments and Exchange Act, bringing them under securities-style disclosure, reporting, and market surveillance rules. Exchanges listing the assets must publish detailed token information such as issuer status, blockchain architecture, and volatility metrics. New explicit insider trading prohibitions will bar issuers, exchange executives, and related parties from trading on non-public information including planned listings, delistings, and bankruptcies. Amendments are expected for the 2026 ordinary Diet session. The FSA also proposes aligning crypto tax with equities at a flat 20% rate, potentially effective in 2026, applying to individuals and firms.

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