Retail Crypto Trading in Japan May Face Major Reset as Tax Cut Plan Advances in Lower House

Japan’s Lower House has advanced a bill that would bring crypto assets under the country’s financial instruments framework. The move would place digital assets closer to the regulatory treatment of stocks and bonds. It could also open the door to potential exchange-traded products linked to crypto, including ETFs.

The legislative shift builds on a wider reform package already under discussion by regulators. The Financial Services Agency has been working on reclassifying crypto assets under securities law. The proposals also include a reduction in capital gains tax from as high as 55 percent to a flat 20 percent, aligning digital assets with equities and bonds in tax treatment.

Crypto Regulation Shift Advances in Japan

The legislation introduces stricter trading rules for crypto assets. According to Bloomberg reporting today (Thursday), the aim is to place digital assets under a securities-style regime. This would extend oversight to areas such as trading conduct and market structure, similar to traditional financial instruments.

The reform would mark a structural change in Japan’s approach to digital assets. Crypto assets such as Bitcoin and Ether would fall under securities-style regulatory treatment rather than remaining outside the core financial instruments framework.

The legislative process is still ongoing. The bill is expected to move to the Upper House for further review. If approved, it is expected to take effect next year.

BIG: Japan advances a new bill that would bring digital assets under securities-style regulations and slash the maximum crypto tax rate from 55% to 20%. pic.twitter.com/pFOJ28wfyr

Japan May Cut Crypto Tax

The tax changes would reduce capital gains on crypto assets, bringing crypto taxation in line with equities and bonds. The reform is expected to take effect in 2028, according to the reported timeline.

The combined regulatory and tax measures would mark a broader shift in Japan’s treatment of digital assets. The framework would move the sector closer to traditional capital markets while final approval in the Upper House is still pending.