Japan Slashes Crypto Tax to 20%

Japan's parliament is advancing a significant crypto reform bill that would classify digital assets as financial products. A key parliamentary committee advanced legislation on June 10, which is expected to bring the top tax rate on eligible crypto gains down to a flat 20%, aligning them with securities. This reform moves crypto transaction rules from the Payment Services Act to the Financial Instruments and Exchange Act.

This upcoming change, with individual tax implications slated for 2028, also introduces possibilities for crypto ETFs in Japan. Stricter investor protections are a key component, including bans on insider trading and enhanced oversight for crypto firms. Penalties for unregistered operators will also increase significantly.

However, not all crypto activities will benefit from the tax reduction. Staking rewards, DeFi yields, NFTs, and transactions on foreign exchanges are expected to remain subject to higher tax rates. Asset managers anticipate potential launches of spot Bitcoin vehicles by mid-2026, pending regulatory approval.