Japan's Crypto Reclassification Shifts Taxes from 55% to 20%
JL
Jordan Langdon
stablecoin US legislation · Apr 10, 2026
Source: The Digital Ledger Data Terminal
Investors in Japan will see their maximum tax rate on cryptocurrency gains drop from 55% to a flat 20.3%. This change follows the cabinet's approval of a bill to reclassify 105 cryptocurrencies, including Bitcoin and Ethereum, as financial instruments. The move shifts oversight from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), which governs stocks and bonds.
Under the previous system, crypto gains were treated as miscellaneous income and combined with salary, which pushed many investors into higher progressive tax brackets. The new framework treats crypto as a financial asset, allowing for separate taxation and a three-year carryforward of losses to offset future gains.
The bill, which is expected to pass the Diet in the second quarter of 2026, will be fully enforced by early 2027. Along with the tax reform, the FIEA brings mandatory reporting for all listed tokens and criminal penalties for insider trading and market manipulation.
Japanese Venture Capital firms can now hold and invest in crypto assets directly through Limited Partnerships. This change, supported by the Ministry of Economy, Trade and Industry, aligns with Prime Minister Fumio Kishida's "New Capitalism" policy. The reclassification also removes legal barriers to the potential approval of spot Bitcoin ETFs in the Japanese market.
stablecoin US legislationcrypto regulation billcrypto IRS ruling
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