Japan's regulator plans to change the classification of cryptocurrencies
Date: 2024-12-30 Author: Henry Casey Categories: IN WORLD
Japan's Financial Services Agency (FSA) has expressed its intention to change the classification of cryptocurrencies from "payment instruments" to "financial assets." The proposal was included in the agency's requests for tax reforms for the 2025 fiscal year, as reported by local media CoinPost and official FSA documents.
Currently, cryptocurrencies in Japan are regulated by the Payment Services Act and are considered exclusively as means of payment. However, the new approach involves recognizing them as financial instruments that can be used by the general public for investment.
This measure could strengthen the status of cryptocurrencies in the country, bringing them closer to traditional investment assets such as stocks. At the same time, the FSA emphasizes that the implementation of such changes will depend on the stability of the crypto industry.
While the current proposals do not contain direct demands for tax reform, they hint at the possibility of revising the current tax rules. Currently, traders are required to declare cryptocurrency income as “other income,” which could be taxed at up to 55% for high-income groups.
The FSA’s proposal is in line with the ruling Liberal Democratic Party’s (LDP) 2025 tax policy recommendations, which include strict liability and investor protection standards for cryptocurrencies similar to those that apply to stock investments.
The LDP also advocates changing the tax system for cryptocurrencies, proposing a move to a capital gains tax. However, the FSA is leaning toward a more comprehensive integration of cryptocurrencies into the income tax system, highlighting the differences in approaches within the country.
A key argument in favor of the reform is the outdated approach to regulation. LDP Deputy Secretary-General Masanobu Ogura said that cryptocurrencies have gone beyond being a means of payment to being an important investment tool and a source of innovation.
These changes are becoming more relevant against the backdrop of growing strategies of Japanese companies such as Metaplanet and Remixpoint, which are actively increasing their Bitcoin portfolios.
In the coming years, changes in Japanese legislation may set a new direction for global regulation of cryptocurrencies, making them more accessible to the mass investor.
