Japan’s Financial Services Agency (FSA) is advancing a proposal to classify cryptocurrencies, including Bitcoin, as financial products. This significant regulatory shift could pave the way for the introduction of cryptocurrency exchange-traded funds (ETFs) within the country.
The proposal also includes a plan to implement a flat 20% capital gains tax rate on crypto assets, replacing the current progressive tax structure that can reach up to 55%. This potential tax reduction is seen as a major incentive for increased investment.
Japan’s crypto market has demonstrated substantial growth, with domestic platforms holding assets exceeding 5 trillion yen (approximately $34 billion) and active crypto accounts surpassing 12 million.
The FSA’s initiative aims to align Japan’s regulatory framework with evolving global standards, facilitating greater institutional adoption and enhancing market liquidity.
In a related development signaling regulatory endorsement for stablecoins, Japan granted its first stablecoin-related license to SBI VC Trade. This license enables the platform to support Circle’s USDC stablecoin.