Japan’s Financial Services Agency (FSA) has proposed a significant reclassification of cryptocurrencies, aiming to facilitate the launch of crypto exchange-traded funds (ETFs) and implement a flat 20% tax on digital asset income. This proposal, introduced on Tuesday, seeks to categorize cryptocurrencies as 'financial products' under the Financial Instruments and Exchange Act (FIEA), aligning them with traditional securities. The change would replace the current progressive tax system, which can reach up to 55%, with a uniform 20% rate, making crypto investments more appealing to both retail and institutional investors. This initiative is part of Japan's broader 'New Capitalism' strategy to enhance its investment-led economy. The FSA noted a growing interest in crypto, with over 12 million active domestic accounts and assets exceeding 5 trillion yen (around $34 billion). The proposal also reflects a global trend of increasing institutional engagement in crypto, as evidenced by over 1,200 financial institutions holding US-listed spot Bitcoin ETFs. Read more AI-generated news on: https://app.chaingpt.org/news