Japan's FSA Proposes Considering Crypto Assets as Financial Products
Date: 2025-06-25 Author: Oliver Abernathy Categories: IN WORLD
The Financial Services Agency of Japan (FSA) has proposed changing the legal status of crypto assets, which will pave the way for the launch of cryptocurrency exchange-traded funds (ETFs) and the introduction of a flat tax rate of 20% on income from cryptocurrencies. According to the proposal, cryptocurrencies will be classified as financial products under the Financial Instruments and Exchange Act, which is consistent with the regulations for securities and other traditional instruments.
Previously, income from cryptocurrency transactions in Japan was taxed on a progressive scale, the rate of which could reach 55%. The introduction of a flat tax of 20%, comparable to the tax on profits from stock trading, is intended to make crypto investments more profitable for both private and institutional investors. This change is part of the state program "New Capitalism" aimed at stimulating investment activity in the country.
According to the FSA, by January 2025, there were more than 12 million active cryptocurrency accounts in Japan, with the total amount of funds placed on platforms exceeding 5 trillion yen (approximately $34 billion). Japanese investor participation in the crypto market has already surpassed the volume of transactions in the foreign exchange market and the bond segment, which is especially noticeable among tech-savvy retail users.
In addition to tax reforms, the FSA is looking to support the growing institutional interest in digital assets. Currently, more than 1,200 large financial institutions, including US pension funds and Goldman Sachs, invest in Bitcoin-based ETFs. The regulator intends to promote the development of a similar market in Japan, given the global expansion of digital financial products.
In early 2025, SBI Holdings subsidiary SBI VC Trade received the country's first stablecoin license and announced plans to support Circle's USDC token. In April, major financial players including Sumitomo Mitsui Financial Group (SMBC), TIS Inc., Ava Labs and Fireblocks signed a memorandum on the joint development and commercialization of stablecoins pegged to the dollar and yen. They are planned to be used for settlements with tokenized assets such as stocks, bonds and real estate.
Earlier, it was reported that Japan intends to officially classify cryptocurrencies as financial assets starting in 2026. The proposed changes to legislation and tax policy reflect the country's desire to adapt to modern trends and increase the attractiveness of the crypto market for all participants.
