Japan Cuts Crypto Tax Rate to 20% in Bid to Boost Trading

Japan's lower house has approved a bill to reduce digital asset gains taxes from a maximum of 55% to a flat rate of 20%. The proposal would also classify cryptocurrencies as financial instruments under the Financial Instruments and Exchange Act, allowing for the creation of crypto ETFs.

The framework could take effect next year if approved by the upper house. According to Masato Yoshizawa, an official from Japan's Financial Services Agency policy and markets bureau, the regulator seeks to facilitate innovation by creating a sound trading environment.

The bill also includes tougher trading penalties, with the same penalty for crypto insider trading as for stocks, and stricter penalties for unregistered crypto assets. The prison sentence term will be increased to 10 years from three years.