Japan’s Financial Services Agency (FSA) is preparing a reform to align crypto taxation with that of equities, paving the way for spot ETFs.
The FSA is planning a tax reform that could reshape how Japanese investors approach digital assets. According to the business daily Nikkei, the Japanese FSA intends to submit a proposal to revise the tax code for the 2026 fiscal year. The goal is to align the tax treatment of cryptocurrencies with that of listed stocks.
The official request for revision is expected to be submitted by the end of August, Nikkei sources report. If approved, the reform would take effect in the 2026 fiscal year.
The reform introduces a 20% flat tax on gains from cryptocurrency trading. Currently, crypto income is classified as “miscellaneous income” and subject to a progressive rate that can reach up to 55%, excluding local taxes.
Industry requests
Crypto companies have submitted specific proposals to make Japan’s tax environment more competitive. Among them is the introduction of a three-year carry-forward mechanism for losses, which would allow investors to offset future profits with past losses.
Outlook for spot ETFs
The new framework goes beyond tax revisions. The FSA is also working to facilitate the launch of domestic crypto ETFs by Japanese firms, aiming to strengthen the competitiveness of the country’s digital asset industry.
In parallel with the tax reform, the agency is preparing a bill for 2026 that would bring cryptocurrencies under the supervision of the Financial Instruments and Exchange Act, classifying them as “financial products” rather than “means of payment” regulated by the Payment Services Act.
First regulated stablecoin
In a broader context of openness toward digital assets, the FSA is also preparing to approve Japan’s first yen-denominated regulated stablecoin. JPYC, issued by the Tokyo-based fintech of the same name, plans to release stablecoins worth 1 trillion yen (about $6.78 billion) over three years. The approval, expected in the fall, represents another key step in Japan’s strategy to promote crypto adoption.
