Japan’s Lower House Passes Sweeping Bill to Regulate Crypto Like Stocks, Opening a Path to Lower Taxes and ETFs

Japan’s lower house passed a bill amending the Financial Instruments and Exchange Act to regulate crypto like stocks, opening a path to ETFs and a flat 20% tax (down from up to 55%) while excluding stablecoins, with upper-house passage widely expected.

Japan’s lower house passed a sweeping bill on Thursday to regulate cryptocurrencies like stocks, a structural shift for one of the world’s largest digital asset markets, according to Bloomberg.

The legislation amends the Financial Instruments and Exchange Act (FIEA), moving crypto out of the Payment Services Act and into the same legal framework that governs stocks, bonds, and investment trusts. The reclassification is not cosmetic: disclosure obligations, custody standards, insider-trading enforcement, and investor protections all flow from which legal container an asset sits in. The bill now heads to the upper house, where passage is widely expected, with implementation due within roughly a year, targeting fiscal 2027.

This story is an excerpt from the Unchained Daily newsletter.

The change opens a path to regulated crypto ETFs in Japan, with representatives of the Tokyo Stock Exchange indicating that ETF trading could begin as soon as 2027 if the bill becomes law. It also pairs with a planned tax overhaul: under Japan’s 2026 Tax Reform Outline, crypto gains would be taxed at a flat 20%, replacing a progressive miscellaneous-income rate that can reach 55%, a change expected to take effect in 2028. Exchanges would also face extensive disclosure requirements covering each of the 105 tokens approved for domestic trading.

“We aim to foster more innovation by creating a sound trading environment,” Masato Yoshizawa, a representative from Japan’s Financial Services Agency, told Bloomberg. When the cabinet approved the measure in April, finance minister Satsuki Katayama framed it as expanding the supply of growth capital while ensuring market fairness, transparency, and investor protection.

Notably, stablecoins are excluded from the reclassification and remain regulated under the Payment Services Act as electronic payment instruments. The carve-out comes the same week Japan’s three megabanks, MUFG, SMBC, and Mizuho, announced plans for joint stablecoin transactions, underscoring how Japan is building parallel tracks for investment-oriented crypto and payment-oriented stablecoins.

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