Japan is standing on the threshold of an important regulatory change that could reshape the playing field for crypto market participants.
Amid strict domestic regulations, crypto companies like Metaplanet have sought opportunities abroad, but the expected reforms could bring about a significant change.
Japan Considers Regulatory Reform to Unlock Bitcoin ETFs and Tax Reform
On June 24, Japan's Financial Services Agency (FSA) announced an official proposal. This proposal aims to reclassify crypto assets under the Financial Instruments and Exchange Act (FIEA).
If approved, this change could pave the way for Bitcoin ETFs in Japan. The proposal could also reduce the tax burden for crypto investors from a maximum of 55% to a fixed 20%. This move will make profits from digital assets similar to stock investments.
Local media reported that this proposal will be discussed at the Financial System Council meeting on June 25. This is one of the most serious efforts to regulate crypto in Japan in line with mature financial markets.
Currently, crypto assets in Japan are regulated under the Payment Services Act, limiting their handling as digital payment methods. The proposed transition to FIEA will officially define cryptocurrency as a "financial product".
It will also open up enhanced investor protection measures. This includes creating the necessary legal framework to list Bitcoin ETFs on Japanese exchanges.
"[FSA aims to] strengthen investor protection and market transparency while encouraging broader participation from both institutional and retail investors," local media reported.
This is a powerful shift from Japan's previous cautious stance. It is also part of a broader national strategy to become an investment-driven economy.
Tax Reform Could Boost Institutional Acceptance
One of the most important aspects of the proposal is the shift from progressive taxation to a fixed 20% tax on crypto profits. Notably, this tax rate will be similar to capital gains tax on traditional stocks.
This change could increase domestic participation, especially from high-net-worth individuals and institutions previously deterred by Japan's high tax regime.
In fact, the tax burden may have driven capital movement abroad. BeInCrypto reports that Tokyo-listed Metaplanet recently announced a $5 billion investment in a US subsidiary to purchase Bitcoin.
Some analysts believe Japan's unfavorable crypto regulations partly influenced this move.
"Metaplanet is going beyond Japan's capital market and restrictive legal framework... Japan will be the R&D center, while the US becomes the capital aggregation and BTC purchasing engine," Adam Livingstone wrote.
In the same tone, Metaplanet's filing indicates that "the United States, as the world's leading financial center, provides optimal conditions for efficient and large-scale Bitcoin acquisition and management".
This suggests that moving to the US offers better capital market access and legal clarity about Bitcoin. A domestic tax change could reverse that trend. It could give companies like Metaplanet more reasons to expand crypto operations domestically.
The Japanese government is positioning crypto assets as a strategic pillar in the "New Capitalism" initiative, detailed in the 2025 Revised Design and Action Plan. This plan calls for developing comprehensive Web3 infrastructure, supporting Non-Fungible Tokens, and making Japan a global center for alternative investments.
The FSA proposal also reflects geopolitical influences. Officials are reportedly observing crypto-supportive developments in the US, including regulatory clarity from states like Texas and the pro-Bitcoin stance of the Trump administration.
BeInCrypto reports that Bitcoin investments in Japan have surged as investors hedge against yen weakness. The transition to FIEA and more friendly tax rules will only add momentum to that, potentially leading to a domestic Bitcoin ETF market that institutional and retail investors have long awaited.
If approved, this system overhaul will mark a historic turning point, signaling Japan's transformation from a regulatory gatekeeper to a global champion of crypto usage.
