Stablecoins
Japan Considers Lowering Crypto Taxes in Regulatory Review
Tuesday. October 1 at 1:30 PM
1 min. readJapan's Financial Services Agency (FSA) is planning to review its crypto regulations, potentially reducing taxes on crypto gains and reclassifying digital assets to create a more favorable investment environment by 2025. The upcoming review will assess if the current framework adequately reflects the changing role of cryptocurrencies, with a possible shift to classify digital assets under the Financial Instruments and Exchange Act. This change could lead to stricter investment regulations but also lower tax burdens on crypto profits, potentially reducing the tax rate from 55% to around 20%. The FSA aims to strike a balance between promoting innovation in the digital asset space and protecting investors. The review may also pave the way for the approval of exchange-traded funds (ETFs) containing digital tokens, further integrating cryptocurrencies into Japan's financial market. Japan has been actively strengthening its digital asset sector, with firms exploring blockchain technology and stablecoins. The market has seen increased trading volumes, reaching nearly $10 billion monthly in 2024. The country's regulatory policies may be influenced by the transition of leadership from Prime Minister Fumio Kishida to Shigeru Ishiba, potentially impacting crypto regulations in Japan.