The Japanese government is pushing to recognize major cryptocurrencies (virtual assets) such as Bitcoin as financial products like stocks and bring them into the regulatory framework.
Asahi Shimbun reported on the 16th that the Financial Services Agency of Japan has finalized a policy to define 105 cryptocurrencies handled by domestic exchanges, including Bitcoin and Ethereum, as financial products under the Financial Instruments and Exchange Act (equivalent to Korea's Financial Investment Services and Capital Markets Act). The goal is to submit related legal amendments to the regular Diet session in 2026.
The key of this move is to bring cryptocurrencies into the regulatory framework to increase transparency while granting tax benefits. Currently in Japan, profits from cryptocurrency transactions are classified as "miscellaneous income" and are subject to a high tax rate of up to 55% (including local government tax). But if recognized as financial products, only a 20% tax rate (separate self-assessed taxation) would apply, the same as for stocks or funds.
In return for treating them as formal financial products, strict regulations will follow. The Financial Services Agency plans to mandate exchanges to disclose information on the 105 cryptocurrencies. Specifically, they must clearly inform investors of the following: ◇ characteristics of the cryptocurrency, such as whether there is an issuer ◇ underlying technology such as Blockchain ◇ price volatility risks.
A new measure will also be created to regulate insider transactions carried out using nonpublic information. It will be strictly prohibited for cryptocurrency issuers or exchange officials to trade after learning of important facts such as listings or delistings and issuer bankruptcies before they are disclosed.