Major changes in Japan's cryptocurrency regulations — How the Financial Services Agency's new classification system will bring about change

MissedAirdropBro · 2026-01-13T10:11:48+00:00

Japan's Financial Services Agency is reclassifying 105 cryptocurrencies, including Bitcoin and Ethereum, from "cryptocurrencies" to "financial products." This shift includes a significant tax rate reduction from 55% to 20% on trading profits, enhancing market transparency and investor protection. These regulatory changes aim to legitimize cryptocurrencies as credible investment options and encourage greater market participation.

MissedAirdropBro

2026-01-13 10:11:48

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Japan’s Financial Services Agency is making significant moves. A total of 105 cryptocurrencies, including Bitcoin and Ethereum, will transition from the current classification of “cryptocurrency” to a new category of “financial products.” This shift is not just a name change; it directly impacts how investors calculate profits and is a crucial change.

Shock in Taxation: A Major Shift from 55% to 20%

The most notable change is the reduction in tax rates. Currently, profits from cryptocurrency trading are treated as miscellaneous income with a maximum tax rate of 55%. Under the new policy from the Financial Services Agency, this will be unified to 20%, the same level as stock trading.

This change has significant implications. For example, if you make a profit of 1 million yen, the current tax burden is 550,000 yen, but under the new system, it will be reduced to 200,000 yen. This results in a tax saving of 350,000 yen. Consequently, many individual traders and institutional investors may change their investment decisions.

Enhanced Market Transparency and Investor Protection

At the same time, the Financial Services Agency is implementing new insider trading regulations. This will establish a monitoring system for the cryptocurrency market comparable to that of traditional financial markets.

The goal is to eliminate illegal trading practices and maintain market fairness. As cryptocurrencies are officially integrated into the financial system, overall trust among market participants is expected to increase.

What Will These Changes Bring to Japan’s Cryptocurrency Market?

These regulatory changes signal the Japanese government’s intention to position cryptocurrencies as more “legitimate investment products.” Favorable tax treatment will make it easier for more investors to participate, while strengthened regulations will help maintain market integrity.

For the domestic cryptocurrency industry, this will likely be a milestone toward maturity.

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