Japan Considers Approving Bitcoin ETFs and Reducing Taxes on Cryptocurrencies

• Reclassification of cryptoassets as financial securities
• Cryptocurrency taxation reduced to 20%
• Possible introduction of Bitcoin ETFs in Japan

Japan’s Financial Services Agency (FSA) is considering significant changes to the country’s cryptocurrency regulations. Proposals under discussion include the possibility of reclassifying crypto assets as securities-like financial products, which would allow the introduction of Bitcoin exchange-traded funds (ETFs) and reduce the tax burden. to investors.

At the time of publication, the price of Bitcoin was quoted at US$96.977,69, up 0.6% in the last 24 hours.

Currently, profits from cryptocurrencies in Japan are taxed as miscellaneous income, with rates ranging from 15% to 55%, depending on the individual’s income. The FSA’s proposal suggests aligning the taxation of crypto assets with that of traditional financial instruments such as stocks, by setting a flat rate of 20% on gains.

Furthermore, the potential approval of Bitcoin ETFs in Japan would allow institutional investors to participate in the market in a safer and more regulated manner. However, experts point out that the FSA maintains a cautious stance towards such products, reflecting the strictness of the Japanese regulatory environment.

These initiatives are part of a broader effort by Japan to integrate digital assets into its financial system, ensuring greater transparency and investor protection. The FSA is conducting closed-door study sessions with industry experts to assess whether the current regulatory framework is suitable for the growing cryptocurrency market. A reform policy is expected to be announced by June 2025, with legal amendments proposed at the National Congress’s regular session in 2026.

Meanwhile, the leader of the Democratic People's Party of Japan, Yuichiro Tamaki, has promised to reduce taxes on cryptocurrencies to 20% if elected, aiming to align the taxation of crypto assets with that of traditional investments and position Japan as a leader in the Web3 sector.

Meanwhile, the FSA continues to step up its oversight of the cryptocurrency market, taking action against unregistered exchanges and seeking to balance fostering innovation with maintaining financial stability.

If implemented, these measures could strengthen Japan's position as a global hub for digital asset investment, attracting both domestic and international capital.