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- Japan plans to classify 105 cryptocurrencies as financial products with mandatory disclosures.
- Proposed flat 20% capital gains tax would replace the current 55% top rate.
- Banks may soon be allowed to hold crypto and operate as licensed exchanges.
Japan’s Financial Services Agency (FSA) is moving forward with a major revamp of the country’s cryptocurrency regulations, signaling a new era for digital assets in the nation. The proposed changes aim to classify cryptocurrencies as “financial products” under the Financial Instruments and Exchange Act, a shift that would bring stricter oversight and transparency to the local crypto market.
Mandatory Disclosures for Top Cryptos
If approved, exchanges listing the 105 recognized cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), would be required to disclose detailed information about each token. These disclosures would cover issuer identity, underlying blockchain technology, and volatility profiles. The move would also extend insider trading regulations to crypto assets for the first time, restricting trading by those with access to sensitive, non-public information such as upcoming listings or delisting plans.
Flat 20% Capital Gains Tax Proposal
Japan currently taxes cryptocurrency earnings as miscellaneous income, with top traders facing rates up to 55%—among the highest worldwide. The FSA is pushing for a shift to a flat 20% capital gains tax for the 105 approved cryptocurrencies, aligning crypto taxation more closely with stock market rules. This reform is intended to simplify reporting for investors and reduce the tax burden on high-earning traders while encouraging broader participation in the market.
Also Read: Bitcoin Loses 2025 Gains Amid Market Volatility – What Investors Need to Know
Banks Could Enter the Crypto Space
The regulator is also considering allowing Japanese banks to hold cryptocurrencies for investment purposes, a move that could reshape the financial landscape. Currently, banks are largely barred from acquiring digital assets due to volatility concerns. Additionally, the FSA is exploring whether banks could operate as licensed crypto exchanges, offering trading and custody services directly to customers. These steps would integrate traditional finance with digital asset markets, providing new opportunities for institutional participation.
The FSA plans to present the new law proposal to Japan’s main parliamentary session in 2026. If passed, the legislation could position Japan as a global leader in crypto regulation, balancing investor protection with innovation. The combination of mandatory disclosures, a simplified tax regime, and potential bank participation signals a more structured and secure crypto environment in the country.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
