Japan Reclassifies Crypto Assets as Financial Products, Cuts Tax Rate

Japan is taking steps to regulate cryptocurrency and make it more investable. The country's Diet, or parliament, has given final approval to a law that reclassifies Bitcoin, Ethereum, and XRP as financial products, reducing the top tax rate from 55 percent to a flat 20 percent.

The move aims to bring crypto assets closer to the securities framework, which would require disclosure duties, tighter conduct rules, and clearer routes for listed products. This could make it easier for pension funds and retail investors to manage crypto assets, rather than treating them as miscellaneous income.

However, the article notes that while a 20 percent tax rate is proposed, it has not been confirmed yet. Japanese regulators have been studying whether crypto assets with investment characteristics should be brought closer to the securities framework.

The industry wants this change because it would make it easier for financial institutions to wrap crypto assets in products their clients already understand, such as ETFs. This could bring mainstream capital into the market and make crypto more investable for ordinary savers.