Japan was one of the first countries in the world to legally define and regulate crypto
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Japan is gearing up for a major crypto regulatory reset. The Financial Services Agency (FSA) is deliberating on a legal amendment that could reclassify crypto from a payment tool to a “financial product” in order to boost investor protection amid crypto accounts quadrupling over five years. On November 26, the FSA working group reviewing crypto regulation convened for the sixth time to discuss persistent consumer complaints, a rise in overseas fraud schemes, and the growing threat of sophisticated cyber attacks. According to discussions, there are approximately 350 crypto-related consumer complaints on average each month. The shift from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA) would trigger rigorous disclosure rules, insider trading protections, and criminal penalties for crypto businesses. Crypto tax relief The working group also suggests introducing a flat 20% tax on crypto gains, bringing them in line with stock trading. Crypto profits are currently treated as miscellaneous income and taxed at 15% to 55%, depending on a taxpayer’s income bracket. Tatsuo Oku from the Blockchain Promotion Association (BCCC) said that with the number of crypto accounts growing to 13 million in Japan, he anticipates demand to expand further if tax rules were aligned with financial products. Rintaro Kawai, CEO of ANAP Holdings, which operates a bitcoin trading desk in Japan, warned that Japan is falling “significantly behind” global Bitcoin adoption and said the country “has no future” without bold tax reforms. Crypto identity crisis Professor Yoshikazu Yamaoki from Shinshu University’s faculty of economics and law said the current overhaul reflects growing recognition that the crypto market increasingly resembles a securities ecosystem rather than a payments niche. “The prices of crypto assets like Ethereum or Bitcoin fluctuate far too much. So they also don’t really function as payment instruments,” he explained. “The people who…
Filed under: News - @ November 29, 2025 3:21 am