Japan Proposes Major Cryptocurrency Reform: Towards Bitcoin ETFs and Massive Tax Cuts
Japan is facing a major turning point in its cryptocurrency policy, as the Financial Services Agency (FSA) has formally proposed regulatory reforms that aim to pave the way for the launch of a Bitcoin ETF and significantly reduce taxes for investors. If approved, the move would not only bring Japan closer to mature financial markets like the US, but could also reverse the flow of capital out of the country.
Unlocking ETFs: From Digital Assets to Financial Products
Currently, cryptocurrencies in Japan are regulated under the Payment Services Act, which considers them a digital means of payment, limited to non-financial transactions. However, the FSA’s new proposal on June 24 aims to reclassify crypto assets under the Financial Instruments and Exchange Act (FIEA), a framework that applies to traditional securities such as stocks, bonds, and derivatives.
The move to FIEA would make cryptocurrencies “financial products,” paving the way for the legal listing of Bitcoin-based exchange-traded funds (ETFs) in Japan. This is a major step forward in creating more professional, safe, and transparent investment tools for both institutional and individual investors.
According to local sources, the Financial System Council will officially discuss the proposal on June 25, which is considered the most important discussion on cryptocurrencies within the Japanese government framework to date.
Tax Reform: From 55% to 20%, Putting Crypto on a Par with Stocks
No less important, the tax reform that comes with the proposal has also attracted great attention. Accordingly, profits from cryptocurrency investments will no longer be subject to the current maximum progressive tax rate of 55%, but will be subject to a fixed capital gains tax rate of 20%, equivalent to the tax levied on stock transactions.
This is an important step to create a fair playing field for cryptocurrency investors, while also encouraging stronger participation from domestic investors. High-net-worth individuals and organizations who were previously afraid of high taxes may return to the market if the new tax rate is applied.
Notably, the high tax burden in recent times has forced many large companies in the industry, such as Metaplanet, to expand to foreign markets. Metaplanet, a Tokyo-listed company, recently transferred $5 billion to its US subsidiary to buy Bitcoin and expand operations in a more favorable regulatory market.
A national strategy in “New Capitalism”
The FSA’s reform proposal is not a single action. It is part of Japan’s comprehensive development strategy called “New Capitalism” initiated by the government to reshape the country’s economic model towards innovation, investment and technology.
Japan’s 2025 grand design plan emphasizes the development of Web3 infrastructure, support for NFTs, stablecoins and making Japan a global alternative investment hub. Legalizing Bitcoin ETFs and tax reform are important parts of this strategy.
In addition, Japanese authorities are also closely watching developments in the US, where the Trump administration is actively promoting Bitcoin-friendly policies and states like Texas have created a clearer legal environment for cryptocurrency activities.
Clear signals from capital flows and investment confidence
Market data shows that interest in Bitcoin in Japan is growing, especially in the context of the yen's depreciation and rising inflationary pressures. Many investors see Bitcoin as a hedge and a long-term value preservation channel.
If these reform proposals are passed, Japan could not only retain domestic capital but also become a new destination for international capital seeking a clear and favorable legal environment in Asia.
Conclusion: From "gatekeeper" to global cryptocurrency champion?
Japan was once known for having one of the world's strictest legal systems for cryptocurrencies, a consequence of major hacks such as Mt. Gox. However, with its current ambitious reform proposals, the country is sending strong signals of its desire to transform.
If implemented, this would be a historic turning point, marking Japan's transformation from a cautious, conservative market to a pioneer in accepting and integrating digital assets into the mainstream financial system. This would not only create momentum for domestic development but could also reshape Japan's position on the global cryptocurrency map.