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Japan's Financial Services Agency (FSA) unveiled plans on June 24 to reclassify cryptocurrencies as financial products under the Financial Instruments and Exchange Act. This landmark proposal would allow the creation of crypto exchange-traded funds (ETFs) and introduce a flat 20% tax rate on digital asset gains — a significant reduction from the current progressive tax system that can reach 55%.
The proposed tax changes mirror Japan's treatment of stock investments, potentially making crypto more attractive to both retail and institutional investors. 【Data point】: Active crypto accounts in Japan surpassed 12 million in January 2025, holding assets worth ¥5 trillion ($34 billion) — exceeding participation in some conventional financial products like corporate bonds.
The FSA cited growing worldwide institutional interest, noting over 1,200 financial entities — including Goldman Sachs and U.S. pension funds — now hold spot Bitcoin ETFs. ——This regulatory shift forms part of Japan's "New Capitalism" strategy to position itself as an investment-driven economy——
Parallel to the regulatory changes, Japan's financial sector is advancing stablecoin infrastructure. In April, a consortium including Sumitomo Mitsui Financial Group and Ava Labs began exploring yen-pegged stablecoins for settling tokenized assets. SBI VC Trade became Japan's first licensed stablecoin operator in March, preparing to support USDC transactions.
The FSA's proposal document included a chart showing Japan's crypto adoption trajectory alongside global ETF fund flows, illustrating the market's rapid expansion. Interestingly, crypto ownership now outpaces participation in foreign exchange markets among tech-savvy investors.
While the proposal marks a significant policy shift, implementation details remain under discussion. Market observers anticipate the changes could take effect by late 2025, pending parliamentary approval and industry consultations.