Japan Unveils Landmark Crypto Reforms: Lower Taxes & Bitcoin ETFs on the Horizon

On June 24, 2025, Japan’s Financial Services Agency (FSA) introduced a significant set of proposals designed to overhaul the nation’s approach to digital assets. Central to these reforms is the reclassification of cryptocurrencies: rather than being regarded merely as payment methods, they would be treated as financial products under the Financial Instruments and Exchange Act. This shift would enable the listing of Bitcoin and other cryptocurrency ETFs on Japanese exchanges—a practice that has previously been prohibited.

In addition, the FSA has recommended a major tax reform on crypto gains. The current system, which can impose tax rates up to 55%, would be replaced by a flat 20% rate. Such a move would bring the taxation of cryptocurrencies into alignment with the capital gains tax on stocks and other securities, thereby making Japan a more attractive destination for both retail and institutional investors.

These initiatives are part of Japan’s broader “New Capitalism” framework, which seeks to balance investor protection with market innovation. To further develop these reforms, the FSA has established a dedicated working group, and discussions are set to continue at the Financial Services Council meeting scheduled for June 25, 2025. Should these proposals be implemented, they would represent a notable departure from Japan’s traditionally cautious stance on cryptocurrencies, potentially positioning the country as a leading center for digital asset activity.