Japan is introducing a major reform to its cryptocurrency regulations in a bid to slash taxes on capital gains derived from tokens, as well as reclassify how digital currencies should be incorporated into the Japanese financial system.
Included in this effort to modernize Japan’s approach to cryptocurrency is a proposed lowering of the capital gains tax on crypto transactions from the current rate of 55 to 20%. Moreover, the LDP plans to create the cryptocurrencies as a new asset class that is distinguishable from the securities specified by the Financial Instruments and Exchange Act.
Japan Shifts to Pro-Crypto Market Strategy
A key LDP lawmaker, Akira Shiizaki stressed that the proposed restructuring would let cryptocurrencies be treated as a separate category in the financial landscape and that they will be differently treated from other financial products.
自民党・デジタル社会推進本部にてweb3WGの制度改正案が公表。暗号資産を金商法上の有価証券とは異なる新たなアセットクラスとして位置付け、市場の発展、投資家保護、分離課税を実現する案です。なお、制度改正案については、3月31日まで広く皆さまのご意見・提案を募集します。（資料は↓のWGブログ… pic.twitter.com/CEc1f9wiPe
— 塩崎あきひさ 【衆議院議員・愛媛1区】 (@AkihisaShiozaki) March 6, 2025
The proposal goes beyond the tax reduction in imcluding tax collecting on cryptocurrency derivatives trading, which will be taxed exactly same as how traditional spot investments are taxed. Likewise, the LDP has urged the government to implement a deferral on taxes arising out of crypto to crypto transactions, at which point taxes would only be charged when digital tokens are converted into fiat currencies.
These reforms show Japan is distancing itself from the more cautious attitude of previous years towards cryptocurrencies, setting a new trend in tackling these proceedings. The country, which heavily invested in US debt, has now turned to supporting its competitiveness in building a stronger chokehold in the increasing global crypto market.
Here we go.
This is how you start a nation’s strategic reserve, by the people for the people.
Japan is mobilizing to play their own tariffs war: subsidize non-US financial asset ownership. https://t.co/ejGSZnrs9I
— Jeff Park (@dgt10011) March 6, 2025
Japan’s government has always had a balanced approach to handling cryptocurrencies, which regulates the trading of digital assets while at the same time pushing the innovation envelope for cryptocurrencies with minimal interference’, explains Counsultory.
Japan’s Stimulus Bill Sparks Crypto Reforms
Japan’s economic stimulus bill passed November 2024 was seen as one of the reason for the regulatory changes by the LDP, following the fact that it called for crypto tax reform. From March 31, 2025, the public is being asked to be able to comment on the proposal.
Earlier in December 2024, Japanese lawmaker Satoshi Hamada suggested that Japan might establish a Bitcoin strategic reserve like the US does. After all, according to Hamada, Japan had to convert a part of its foreign reserves into Bitcoin to stay competitive in the international economy.
But Prime Minister Shigeru Ishiba, a staunch opponent of Bitcoin, quickly retorted, saying Japan does not have the same enough insight into the US Bitcoin drive to do the same at present. Japan’s regulatory spoilsheet surrounding cryptocurrency is unclear.
The Financial Services Agency (FSA) in Japan has directed technology giants Google and Apple to cease the release of unregistered crypto exchange apps in Japan until those apps were officially registered with Japan’s regulatory bodies, and has done so via intervention in February 2025.
Japan has further developed its crypto policies and the international community watches how this new state of affairs will affect both local investors and the global crypto market.
