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Japan’s House of Representatives passed legislation to treat cryptocurrencies as financial instruments, introduce crypto ETFs and lower capital‑gains tax to a
Japan’s lower house of parliament voted to reclassify cryptocurrencies as financial instruments, a move that would align digital assets with stock market rules and set a flat 20% capital‑gains tax rate for crypto gains [1]. The bill also creates a legal pathway for regulated crypto‑tracking exchange‑traded funds and is slated to move to the upper house for final approval next year [4].
Key takeaways
The draft law moves crypto‑asset transaction rules from the Payment Services Act to the Financial Instruments and Exchange Act, effectively placing digital currencies under the same regulatory umbrella as stocks and bonds [2]. Under the proposal, local exchanges handling assets such as Bitcoin and Ether would be required to publish detailed information about the tokens they list, while issuers of certain assets must meet disclosure obligations when conducting offerings or secondary distributions [2]. The shift also introduces insider‑trading restrictions and penalties of up to ten years in prison and 10 million yen for operators who act without registration [2].
In addition to the regulatory overhaul, the bill pairs the reclassification with a tax reform that would lower the capital‑gains tax on crypto to a flat 20% rate, a significant reduction from the current top rate of 55% [1]. The tax change is scheduled for 2028, giving the market time to adjust. By treating crypto assets as financial instruments, the legislation also opens the door for crypto‑tracking exchange‑traded funds, offering Japanese investors a regulated avenue to gain exposure to digital assets without using traditional exchanges [2].
The passage signals Japan’s intent to integrate cryptocurrencies into its mainstream financial system, providing clearer rules for exchanges, issuers and investors. If the Upper House approves the bill, the new framework could boost institutional participation, especially through the anticipated crypto ETFs, while the lower tax rate may improve after‑tax returns for domestic traders. However, industry observers warn that tighter compliance requirements could pressure smaller exchanges, potentially reshaping the competitive landscape [1]. The next legislative step will determine how quickly these reforms become operational and how they influence Japan’s position in the global .
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The reduction of the capital gains tax rate to a flat 20% is scheduled to come into effect in 2028.
No, the new law will not apply to stablecoins, which will continue to be regulated under the existing payment services framework.
Industry participants warn that the increased compliance, auditing, and disclosure requirements may be too burdensome for smaller firms, potentially leading to a market consolidation.
AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 4 outlets · Jun 11, 2026 · How we report