Japan Reclassifies Crypto as ‘Financial Products,’ Eyes Lower Taxes and ETFs

Parliament moved digital assets out of the payments rulebook and into the same framework as stocks and bonds, laying the groundwork for lower taxes in 2028 and future spot bitcoin funds.

Japan’s parliament approved amendments to the Financial Instruments and Exchange Act on Wednesday that pull cryptocurrencies out of the country’s payments rulebook and place them under the same regime that governs stocks and bonds, according to Coinpost.

Japan’s parliament has passed a bill reclassifying “crypto as financial products,” CoinPost reported Wednesday. The amendment, which had cleared the lower house earlier this year, also sharpens enforcement, according to the report. It raises the maximum prison term for running an unregistered crypto business to 10 years, from three, and lifts the maximum fine to 10 million yen (nearly $62,000) from 3 million yen (about $18,500), according to the report. It also adds insider-trading restrictions and requires token issuers and exchanges to disclose more to investors. The shift is due to take effect in 2027, CoinPost reported.

The amendment also lays the legal groundwork for a lower crypto tax rate and for future spot bitcoin exchange-traded funds, CoinPost reported. Lawmakers are working on a plan to tax crypto gains at around 20%, down from a progressive rate that can reach 55%, according to the report. That cut is not expected to take effect until 2028.

Lawmakers also plan to establish a framework for spot cryptocurrency ETFs, CoinPost reported. The Japan Exchange Group is reportedly planning to list one such product as soon as next year.

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