Japan plans to reduce cryptocurrency tax rate to 20% by 2025 and introduce Bitcoin ETF

Cryptocurrency Tax Exemptions and Regulatory Changes in Japan
Japan’s Financial Services Agency (FSA) is preparing major regulatory changes for the cryptocurrency industry, including reducing the tax rate on cryptocurrency gains from 55% to 20% and potentially approving a Bitcoin spot exchange-traded fund (ETF). These reforms are expected to be officially announced in June 2025 and are expected to take effect in 2026.
The FSA has been working closely with industry experts to evaluate existing cryptocurrency regulatory policies. This move is intended to improve the overall legal framework for digital assets and provide greater clarity for businesses and investors. The planned tax cuts will reduce the burden of cryptocurrency gains, making them more attractive to investors, while aligning with the country's standard financial income tax rates from 20%.
The current 55% tax rate is considered too high by many investors and industry participants, and lowering the tax rate is expected to enhance Japan's competitiveness in the global digital asset market. The Nikkei report said that these proposed policy changes will be officially announced in mid-2025 and the legislative process will begin in the 2026 parliamentary session.
Bitcoin Spot ETFs and Crypto Reclassification
Japan is exploring lifting its ban on bitcoin spot exchange-traded funds, given that the U.S. Securities and Exchange Commission (SEC) has approved bitcoin and ethereum spot exchange-traded funds. This move is in line with global financial market trends and will help Japan strengthen its position in the digital asset sector.
In addition to the ETF approval, the FSA also intends to reclassify cryptocurrencies as financial products, bringing them under regulatory oversight similar to traditional securities. By bringing digital assets into a clearly defined legal framework, Japanese regulators aim to enhance market stability and investor confidence.
Focus on first ETF approvals for Bitcoin and Ethereum
A research panel in October recommended that Bitcoin and Ethereum be the focus for the first cryptocurrency ETF approval. The same panel also suggested that spot cryptocurrency trading and ETFs should have separate tax regulations, but further discussions are needed to finalize the details.
The restructuring is expected to provide greater flexibility for investors while ensuring that tax policies remain consistent with the evolving digital asset market. However, specific guidelines on how other cryptocurrencies may be included in the regulatory changes are still under discussion.
Institutional Interest and SoftBank’s Cryptocurrency Investments
Japanese financial institutions have been preparing for these upcoming regulatory changes. As one of the largest financial entities in Japan, SoftBank has already expanded its presence in the cryptocurrency industry. The company recently made a strategic investment in Cipher Mining and acquired an option for a data center in Texas, showing its growing confidence in blockchain technology and digital assets.
SoftBank's financial results also reflect the increased interest in digital assets. The company reported a 7.4% increase in net income to 436.6 billion yen in the first nine months of 2024. The trend suggests that institutional investors in Japan are preparing for a more cryptocurrency-friendly regulatory environment.

Japan reduces cryptocurrency tax from 55% to 20%! pic.twitter.com/rjQztt7giG
— Michael Saylor⚡MicroStrategy Founder (@Saylorsatsire) February 11, 2025

Impact on the Japanese cryptocurrency market and future prospects
The proposed regulatory changes could make Japan a more attractive destination for cryptocurrency-related businesses and investors. The planned tax cuts, coupled with clearer regulatory guidelines, are expected to encourage more companies to set up operations in the country. The shift could help Japan position itself as a leading hub for digital finance in Asia.
Regulatory discussions within the FSA are currently focused on determining which cryptocurrencies will be included in the new framework. While Bitcoin and Ethereum are expected to be the initial implementation targets, the status of other digital assets remains uncertain. The agency is also considering simplifying the procedures for cryptocurrency companies to operate in Japan, aiming to strike a balance between regulatory oversight and business efficiency.
Implementation timeline and investor protection
The FSA has laid out a plan to roll out these new regulatory policies in phases. First, tax cuts and ETF approvals are expected to be implemented, followed by broader regulatory changes after legislative approval in 2026. The agency also stressed the importance of maintaining strict anti-money laundering (AML) measures in the new framework to ensure that Japan's cryptocurrency market remains secure and in line with international standards.
In addition, Japanese regulators are developing transparency requirements for cryptocurrency businesses. These measures are intended to improve investor protection and promote fair practices in the digital asset industry. The FSA plans to publish detailed guidelines for public review by April 2025 to allow stakeholders to provide feedback before finally implementing the new policy.
With these upcoming changes, Japan is positioning itself as a key player in the global cryptocurrency industry, creating a more structured and competitive environment for digital assets.
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