Japan eyes 20% flat tax for crypto trades, path to ETF offering with tax code revision: report

The Block

Aug 24, 2025 02:31:43

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Japan's Financial Services Agency (FSA) plans to request a review of the tax code's treatment of cryptocurrencies for the 2026 fiscal year, aiming to treat crypto more similarly to listed stocks, according to a report from local news outlet Nikkei.

The request, slated for the end of August according to the report, will include moving crypto gains to a separate tax bucket, subject to a flat 20% tax rate. Industry firms have also asked for a three-year loss carry-forward as part of the taxation change. Currently, crypto income is treated as "miscellaneous income," with a progressive tax rate of up to 55%, not including local taxes.

The FSA's proposal will also make it easier for Japanese firms to launch domestic crypto ETFs, as the country aims to boost the competitiveness of its crypto industry. Separately from the tax change, the FSA is planning a 2026 legislative bill to bring crypto under the Financial Instruments and Exchange Act as a "financial product" rather than a "means of payment" regulated under the Payment Services Act.

The shift comes as the FSA also plans to approve the country's first domestically regulated yen-denominated stablecoin, JPYC, The Block recently reported. JPYC, issued by the Tokyo-based fintech company of the same name, aims to issue 1 trillion yen ($6.78 billion) worth of its stablecoin across three years.

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