Cryptocurrencies in Japan: Investors May Pay Lower Taxes in 2026

• Cryptocurrency taxation in Japan increases to 20%
• Reform could attract institutional and corporate investors
• Japan prepares ETFs and yen-backed stablecoin

Japan is about to implement one of the most significant changes to its cryptocurrency tax policy. The Financial Services Agency (FSA) announced which aims to align the tax regime of these assets to the same model applied to shares as of fiscal year 2026.

According to the proposal, profits from cryptocurrency trading would be taxed at a flat rate of 20%. Currently, these profits are classified as "miscellaneous income" and can be taxed progressively, reaching up to 55% in some cases, which discourages some retail investors.

The plan also allows taxpayers to declare losses on cryptocurrency transactions for up to three years, in line with what already occurs in the stock market. This change would facilitate reporting and make the activity more attractive to traders and institutional investors operating in the country.

Beyond the tax issue, the FSA is pursuing a parallel bill that would reclassify cryptocurrencies under the Financial Instruments and Exchange Act. This would mean they would no longer be treated solely as payment methods but would be recognized as legitimate financial products, paving the way for the development of cryptocurrency ETFs in the domestic market.

This move comes at a strategic time, as Japan seeks to consolidate its position as a digital finance hub amid global competition. Another step in this direction is the preparation for the launch of the first yen-backed stablecoin, JPYC. Created by Tokyo-based fintech JPYC Inc., the digital currency aims to reach an issuance of 1 trillion yen, equivalent to approximately US$6,8 billion, over the next three years.

These measures reinforce Tokyo's intention to attract foreign capital, foster innovation in the sector, and establish a more competitive environment for companies and investors operating with cryptocurrencies, consolidating the country as one of Asia's most important centers in the segment.