The Financial Services Agency of Japan (FSA) is expected to propose a review of tax regulations on cryptocurrency, aiming to align the taxation methods more closely with listed stocks and pave the way for the future implementation of cryptocurrency ETFs, according to Nikkei. At the same time, the FSA is also said to approve the first yen-pegged stablecoin managed by Japan this fall, in an effort to promote the use of cryptocurrency.
According to reports, the FSA will request amendments to tax regulations for the fiscal year 2026, proposing to categorize profits from cryptocurrency into a separate tax group, applying a fixed tax rate of 20%, similar to stocks. Industry businesses are also calling for the allowance of loss carryforwards for three consecutive years as part of this change. Currently, income from cryptocurrency is classified as 'other income' with a progressive tax rate of up to 55%, excluding local taxes.
In addition, the FSA's proposal will make it easier for Japanese companies to launch domestic cryptocurrency ETFs, thereby increasing the competitiveness of the industry. Alongside tax changes, the FSA is also preparing legislation for 2026 to classify cryptocurrency as a 'financial product' under the Financial Instruments and Exchange Act, rather than just being considered a 'means of payment' under the Payment Services Act as it is currently.
This move comes as the FSA also plans to approve the JPYC stablecoin pegged to the yen, issued by a fintech company of the same name in Tokyo. JPYC aims to issue a total of 1 trillion yen (approximately 6.78 billion USD) over the next three years.