Japan is considering major changes to its cryptocurrency framework, including tax-related measures and oversight functions. The amendment will offer a new approach to a previous conservative model in the wake of increased digital asset adoption.
Japan Will Reclassify 105 Assets
Japan will overhaul parts of its crypto regulations, ushering in sweeping reforms by April 2026. The Financial Services Agency (FCA) will reclassify 105 crypto assets, including Bitcoin (BTC) and Ethereum (ETH), as financial products, a move away from the miscellaneous assets tag.
The reforms significantly affected taxes imposed on traders, culminating in a drop for the first time in several years. Under the new framework, traders’ profits are taxed at a flat 20% in line with the existing stock market structure.
Previously, the miscellaneous income tag could be construed as high as 55% comprising both national and local taxes. Crypto experts have long criticized this position as rigid and stifling to market participants, calling for a change while sampling friendlier jurisdictions.
This year, several countries have announced crypto tax incentives to cover traders and miners seeking to attract wider adoption. Japan’s new rules will make crypto assets more acceptable to institutional investors as macro sentiments in Asia soar.
The continent has made tremendous progress in crypto regulations this year, setting its sights on competing with the U.S. market. Beyond tax incentives, crypto will be treated similarly to stocks with disclosures for exchanges listing approved tokens.
Disclosures related to securities prospectuses and standardized risk information will also be required. For traders, aligning both markets is key to bolstering the next growth phase while protecting new equity investors.
Crypto executive Aisar highlighted possible gains for the community, stressing retail adoption.
“Japanese regulators are rethinking crypto. Banks might soon be allowed to hold crypto on their balance sheets. On top of that, Japan is planning to classify crypto as “financial products” and overhaul taxes for the sector. 2026 could be a major year for the crypto community: More adoption and more opportunities for everyone.”
According to Japan’s rules, traders are allowed to carry on losses for up to three years. However, only digital assets that fall under the FSA’s list will get these benefits. The rest of the assets, mainly smaller meme coins, will retain the miscellaneous assets tag.
While the rules allow for trader flexibility, exchanges carry a huge burden in order to protect investors and prevent losses.
Source: https://zycrypto.com/japan-mulls-new-crypto-tax-rules-classifies-bitcoin-ethereum-as-financial-products/
