Japan plans to implement a fixed tax rate of 20% on cryptocurrency transactions and promote the issuance of ETFs through tax law amendments.

On August 24, Nikkei reported that the Financial Services Agency of Japan (FSA) plans to request a review of the handling of cryptocurrency transactions in the fiscal year 2026, with plans applicable to listed stocks. This request, expected to be officially submitted by the end of August, includes the transfer of profits from cryptocurrencies to a separate tax framework, subject to a fixed tax rate of 20%. As part of the tax reform, businesses in the industry are also requesting to deduct losses over three years. Currently, income from cryptocurrencies is considered "other income" in Japan, subject to a progressive tax rate of up to 55%, not including local taxes. The FSA's proposal will also make it easier for Japanese companies to launch domestic cryptocurrency ETF funds, thereby enhancing the competitiveness of the Japanese cryptocurrency industry. In addition to tax reform, the FSA also plans to draft a bill in 2026 to incorporate cryptocurrencies into the Financial Instruments and Exchange Act, transforming them into "financial products" instead of "means of payment" under the scope of the Payment Services Act.