Japan plans to reform cryptocurrency tax systems, setting a flat tax rate of 20%

According to reports from local media, the Japanese Financial Services Agency plans to include cryptocurrency tax reform in its 2026 tax revision proposal. This proposal is expected to combine tax changes with stricter regulations and may introduce ETFs related to cryptocurrencies. The reform plan includes two key parts: First, to amend the tax law, categorizing cryptocurrencies the same as stocks instead of under comprehensive tax. Second, to make legal amendments to reclassify cryptocurrencies as financial products, enabling the FSA to apply insider trading rules, disclosure standards, and investor protection measures under the Financial Instruments and Exchange Act. Currently, Japan taxes cryptocurrency gains as 'miscellaneous income' at a progressive tax rate, which may exceed 50% once local taxes are included. In contrast, stocks and bonds are subject to a flat tax rate of 20%.