Japan Treats Crypto Like Stocks: Major Regulatory Shift

Japan's Parliament has passed legislation that will regulate cryptocurrencies like stocks under the Financial Instruments and Exchange Act.

The bill, which is expected to take effect next year, classifies crypto assets as financial instruments, bringing Bitcoin, Ether, and other tokens under a regulatory framework comparable to stocks and bonds.

Key provisions include slashing capital gains tax on crypto holdings from 55% to a flat 20% rate, aligning with equities, though the change is not set to kick in until 2028.

The legislation paves the way for domestic crypto ETFs, with Japan Exchange Group targeting listings as early as next year.

Industry observers warn that the stricter disclosure and auditing burden could wipe out roughly half of Japan's 27 registered crypto exchange operators.