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Japan Aims to Solidify Its Position as a Digital Asset Center with 20% Crypto Tax Reform

Japan Aims to Solidify Its Position as a Digital Asset Center with 20% Crypto Tax Reform

Bitget-RWA2025/12/01 09:38
By:Bitget-RWA

- Japan will implement a 20% flat tax on crypto gains by 2026, replacing the current 55% progressive rate to boost market participation. - The reform splits the tax between national (15%) and local (5%) authorities, aligning crypto with traditional assets under a separate-taxation system. - Institutional players like SBI and Daiwa are structuring crypto ETFs and investment trusts, signaling confidence in Japan's regulatory clarity. - The move mirrors global trends like OECD's CARF framework, contrasting wi

Japan Plans Major Changes to Crypto Taxation

Japan is preparing to introduce a new tax policy for cryptocurrencies, proposing a uniform 20% tax rate on profits from digital assets. This adjustment is intended to bring crypto taxation in line with the rates applied to stocks and investment trusts. Currently, crypto gains are subject to a progressive tax system that can reach up to 55%, a structure many believe has discouraged domestic trading.

Under the upcoming system, profits from cryptocurrency transactions will fall under Japan’s separate-taxation category. The 20% tax will be divided between the national government (15%) and local governments (5%). Lawmakers expect to include this reform in the 2026 tax package, with final details to be determined by the end of the year.

Recognizing Crypto as a Mainstream Asset

This policy shift signals Japan’s acknowledgment of cryptocurrencies as a well-established asset class. Regulators hope the new tax regime will make digital assets more attractive to both individual and institutional investors. According to the Japan Virtual and Crypto Assets Exchange Association, spot trading volumes reached $9.6 billion in September 2025, reflecting increased market activity. By lowering the tax burden, officials aim to encourage greater participation in a sector previously hindered by high compliance costs and regulatory ambiguity.

Integrating Crypto into Traditional Finance

Japan is also taking steps to further integrate digital assets into its financial system. The Financial Services Agency (FSA) is working on reclassifying cryptocurrencies under the Financial Instruments and Exchange Act. This change will allow digital assets to be included in investment trusts, broadening access for retail investors. Leading asset managers such as SBI Global Asset Management and Daiwa Asset Management are already developing new products in anticipation of the 2026 regulatory updates. For example, SBI is planning to launch Bitcoin and Ethereum ETFs, aiming to manage ¥5 trillion in assets within three years, highlighting strong institutional interest.

Japan’s Approach in the Global Context

These reforms align with international trends toward standardized crypto regulation and reporting. Japan’s strategy is similar to global initiatives like the OECD’s Crypto-Asset Reporting Framework (CARF), which is also being adopted by countries such as Brazil and Switzerland. In Brazil, stablecoins now represent 90% of monthly crypto transactions, prompting the launch of the DeCripto system in 2025 to monitor activity. Switzerland, on the other hand, has postponed CARF implementation until 2027 due to challenges in defining data-sharing arrangements.

Contrasting Global Tax Policies

Japan’s tax reforms stand in contrast to recent wealth-focused measures in other countries. For instance, Swiss voters recently rejected a proposal to impose a 50% tax on inherited wealth over $62 million, with 78% voting against the measure. This outcome highlights resistance to high-income taxes, even as countries like Brazil and Japan seek to balance fair taxation with market development.

Positioning Japan as a Crypto Leader

As Japan moves forward with its 2026 tax reforms, the country is positioning itself as a welcoming environment for digital asset trading. By lowering barriers for both traders and large investors, Japan aims to attract more capital and strengthen its role as a global center for responsible crypto regulation.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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