The proposed changes could lower the capital gains tax rate on assets like Bitcoin (BTC) and Ethereum (ETH) from a current maximum of 55% to a flat 20.
Japan Crypto News
Japan's House of Representatives advanced a bill on June 10 that would reclassify crypto assets as financial instruments, placing them under a regulatory framework similar to the one governing equities and bonds. The legislation cleared the Finance and Financial Affairs Committee and now awaits a vote in the upper house, the House of Councillors, before it can take effect.
The bill was submitted by the cabinet in April and is expected to take effect next year if the upper house approves it. Under the proposed framework, crypto-asset transaction rules would move from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), shifting the basis of oversight exercised by Japan's Financial Services Agency (FSA).
The proposed changes could lower the capital gains tax rate on assets like Bitcoin (BTC) and Ethereum (ETH) from a current maximum of 55% to a flat 20%, in line with the treatment of stocks and bonds. That tax change is expected to take effect in 2028.
Japan Shifts Crypto Into a Financial Market Framework
Under the current regime, the FSA oversees crypto primarily as a means of payment. The reclassification would subject the sector to stricter trading rules, including disclosure requirements for issuers, insider trading restrictions, and stronger penalties for unregistered operators. Exchanges would face tighter oversight, and issuers of certain assets would need to publish information on the assets they handle during offerings or secondary distributions.
The FSA framed crypto assets as financial products separate from securities under the proposed framework, rather than reclassifying them as securities outright. The bill also opens a potential path to crypto-tracking exchange-traded funds (ETFs) in Japan, giving domestic investors a regulated route to digital asset exposure beyond crypto exchanges and listed companies with token holdings, according to Bloomberg.
The legislative push comes alongside activity in Japan's stablecoin sector. The country amended the Payment Services Act in 2023 to introduce "electronic payment instruments," allowing registered service providers and banks to issue and manage stablecoins. Fintech firm JPYC Inc. launched the country's first legally recognized yen-denominated stablecoin, JPYC, in October 2025, while SBI Holdings and Startale Group unveiled JPYSC, a trust bank-backed yen stablecoin for institutional and cross-border use, in February 2026.
Japan's three largest commercial banks, MUFG Bank, Mizuho Bank, and SMBC, plan to begin live commercial transactions using a jointly issued stablecoin within the fiscal year ending March 2027. SBI Shinsei Bank also plans to launch a crypto rewards program for deposit customers this fall, according to Nikkei.
The FIEA reclassification represents a shift from a payments-focused supervisory model toward a capital markets framework. It positions Japan to expand digital asset product offerings for domestic investors while also bringing crypto exchanges under the same level of oversight that governs traditional securities trading.
Related Article: Japan's Ruling Party Backs Crypto ETFs, Yen Stablecoins
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