Japan Eyes Bitcoin ETF, Flat 20% Tax on Crypto Gains

Key Points: 

• Japan’s FSA proposes Bitcoin ETF approval and reclassification of crypto as financial products.
• Crypto gains could shift from 55% tax to a flat 20% under new Japanese proposal.
• Japan’s Web3 strategy aims to boost digital investment, regional growth, and investor accessibility.

Japan’s Financial Services Agency (FSA) released a new proposal on June 24 that could change the regulatory framework for crypto assets. The agency has signaled intent to shift crypto oversight from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA). This change, if approved, would reclassify crypto as financial products under existing securities laws.

Meanwhile, the proposal will be reviewed at the Financial Services Council general meeting on June 25. The move may lead to major changes in how crypto assets like Bitcoin are taxed and accessed by investors in Japan.

Bitcoin Gains May Face Lower Tax Rates Under New Proposal

Under current regulations, crypto gains in Japan are taxed under a progressive system, with rates reaching up to 55%. The FSA’s new framework would introduce a separate self-assessment tax system of approximately 20%, aligning it with how stocks are taxed. This shift could ease the tax burden on crypto investors and encourage broader participation in digital asset markets.

The change is seen as part of Japan’s broader strategy to position itself as an investment-driven economy. Policymakers hope that treating crypto as a traditional financial product will improve transparency and accessibility for both institutional and retail investors.

Japan Considers Lifting Ban on Bitcoin ETF Products

One of the key points of the proposal is the potential approval of Bitcoin exchange-traded funds (ETFs) in Japan. Currently, crypto ETFs are not available on Japanese markets due to regulatory restrictions. Moving crypto assets under FIEA would open the door for the listing of such products, enhancing exposure for local investors.

Investor protection measures under FIEA are expected to apply to Bitcoin and other digital assets once reclassified. This includes rules around disclosure, trading platforms, and investor education. The proposed shift is being reviewed as part of broader national efforts to support Web3 adoption.

Japan’s Web3 Push and Global Policy Influences

The FSA’s move aligns with Japan’s updated “Grand Design and Action Plan for New Capitalism (Revised Edition) 2025.” The government recognizes Web3 technology and digital assets as tools to boost regional economies and create new value. NFTs, decentralized platforms, and token-based systems are part of this wider development plan.

Global influences, including a pro-crypto stance by the U.S. under the Trump administration and policy changes in states like Texas, have also contributed to Japan’s evolving outlook. 

Meanwhile, Japanese investors have turned to companies like Metaplanet for indirect Bitcoin exposure through NISA accounts, which offer tax benefits on capital gains.