Japan’s FSA Plans Crypto Tax Cuts, Bitcoin Spot ETF Approval by 2026
Japan’s Financial Services Agency (FSA) is exploring the possibility of positioning crypto assets as financial products equivalent to securities. This development follows extensive discussions among regulators and industry stakeholders, aiming to reshape Japan’s crypto regulatory landscape by 2026.
According to a report by Nikkei, the FSA has initiated a closed study group with experts to review the regulatory framework governing digital assets.
The agency plans to outline its reform direction by June and seek feedback from the Financial System Council in the fall.
If these efforts lead to crypto assets being legally classified alongside securities, Japan may lift its restrictions on spot cryptocurrency ETFs.
Regulatory Reform: Could Japan Change Their Stance On Crypto by 2026?
A crucial component of the discussions includes whether to regulate cryptocurrencies under the Financial Instruments and Exchange Act (FIEA) or the Payment Services Act.
The scope of regulation—whether it will apply to all digital assets or only major cryptocurrencies like Bitcoin and Ethereum—remains under debate.
Historically, Japanese officials, including FSA Commissioner Hideki Ito and Prime Minister Shigeru Ishiba, have approached crypto ETFs cautiously.
However, growing industry support and global trends, including the U.S. SEC’s approval of Bitcoin and Ethereum ETFs, are pushing Japan toward reconsideration.
The growing institutional demand for digital assets is a significant factor in Japan’s crypto regulatory shift.
The U.S. SEC approved Bitcoin ETFs in January 2024, leading to a surge in institutional investment through firms like BlackRock and Fidelity. Japan appears to be evaluating similar steps to enhance market liquidity and attract institutional investors.
One of the most impactful proposals under review is the potential reduction of Japan’s high crypto taxation, which the Liberal Democratic Party has been pushing since December last year.
Currently, crypto earnings can be taxed at a rate of up to 55%, a significant deterrent for investors.
The proposed reforms may align crypto taxation with financial income tax, reducing the rate to 20%. This change would put Japan on par with other developed economies that offer tax incentives for long-term crypto holdings and certain tax exemptions.
Additionally, the proposed regulations could mandate stricter disclosure requirements under the FIEA, increasing transparency and investor protection.
Japan’s Crypto Strategy and Global Market Trends
Japan’s potential approval of spot crypto ETFs and tax reductions align with global regulatory shifts. In the U.S., the SEC’s approval of Bitcoin ETFs has profoundly impacted market liquidity.
Meanwhile, other jurisdictions, including Hong Kong and Singapore, are also advancing their crypto regulatory frameworks.
Major corporations are already preparing for these regulatory changes. SoftBank, for instance, recently invested in Cipher Mining and secured an option to acquire a 300MW data center in Texas.
Japan’s move might also be influenced by the Japanese securities giant SBI, which recently reported record-breaking crypto-related profits driven by a surging market and expanding business operations.
In its Q3 financial results, SBI announced a 103.5% year-on-year revenue increase to approximately 62.8 billion yen and a 787% rise in pre-tax profits to 18.1 billion yen ($119.6 million).
The firm, which operates SBI VC Trade, BITPoint, and SBI Crypto, has seen a 15.3% quarter-to-quarter rise in crypto accounts and expects its exchange revenue to surpass 600 billion yen ($3.96 million) this quarter.
SBI is also working to become the first Japanese exchange to list USD Coin (USDC), collaborating with U.S.-based Circle and regulatory authorities to introduce stablecoin trading in Japan.
In fact, Metaplanet, another Japanese crypto company, become Japan’s best-performing stock in the past 12 months.
🇯🇵 Metaplanet Inc. has become Japan’s best-performing stocks in the past 12 months, thanks to Bitcoin surge.#Metaplanet #BitcoinStrategy #MetaplanetStockhttps://t.co/JaM4CTmlY8
— Cryptonews.com (@cryptonews) February 10, 2025
Source: cryptonews.com
