Quick Takeaways:
- Japan’s FSA seeks to classify crypto as a financial product under new rules.
- 105 tokens will face mandatory disclosures and insider trading oversight.
- FSA proposes cutting crypto taxes from 55% to a flat 20%.
Japan’s FSA Moves to Classify Crypto as Financial Products, Eyes 20% Flat Tax Rate
Japan is preparing its most significant crypto regulatory shift in years.
The Financial Services Agency plans to reclassify digital assets as “financial products,” according to a new report from Asahi Shimbun.
Japan Plans Major Crypto Reclassification
Under the proposition, a crypto asset would fall under the Financial Instruments and Exchange Act. This change would tighten oversight and align digital assets with traditional investment products.
The move to impose mandatory disclosure requirements for 105 cryptocurrencies on Japanese exchanges. Tokens like Bitcoin and Ether would face strict reporting standards for the first time.
Exchanges must detail each token’s issuer, underlying technology, and volatility profile.
The new framework also extends insider trading rules to crypto markets.
FSA Pushes for 20% Flat Tax on Crypto Gains
Japan currently taxes crypto income as “miscellaneous earnings,” with rates reaching 55%.
This heavy burden has pushed many traders offshore.
The FSA now wants gains on approved tokens taxed at a flat 20% capital gains rate.
The change would align crypto taxation with stocks and derivatives.
A standardized tax rate could boost domestic trading activity and encourage institutional participation.
Japan Introduces New Insider Trading Rules for Digital Assets
For the first time, insider trading regulations may apply to crypto.
The rules would bar individuals with non-public information from trading affected tokens.
This includes knowledge of upcoming listings, delistings, or issuer financial troubles.
The aim is to enhance market fairness and reduce manipulation risks.
The FSA plans to submit the full proposal to Japan’s main parliamentary session in 2026.
Japan Considers Allowing Banks to Hold Bitcoin
The regulatory shift extends beyond exchanges and taxation.
Last month, reports suggested that Japan may allow banks to directly hold Bitcoin and other digital assets.
Current rules restrict banks from owning crypto due to volatility concerns.
The FSA is reviewing whether financial groups should register as licensed crypto exchanges. This change would allow banks to offer trading and custody services.
It could also accelerate institutional adoption across Japan’s financial system.