Japan Pushes for Crypto ETFs and 20% Tax Rate in Regulatory Overhaul

Japan's finance minister has proposed significant changes to the country's approach to digital assets. Satsuki Katayama, Japan's Minister of Finance, announced a formal review to permit cryptocurrency exchange-traded funds (ETFs) at the 'Open Quick 2026' seminar on July 10.

The proposal includes reclassifying virtual assets as financial products through an amendment to the Financial Instruments and Exchange Act. This move would bring digital currencies under the same oversight as traditional securities, providing clearer legal protections for investors and attracting institutional participation.

Major securities firms like SBI Securities and Rakuten Securities are already preparing to list crypto ETFs once the law is amended. These products would allow investors to gain exposure to digital assets through regulated, exchange-traded instruments, potentially broadening the investor base beyond the current retail-heavy market.

The proposed tax reform aims to reduce the tax rate on crypto trading profits from a maximum of 55% to a flat 20%. This reduction could significantly increase net returns for traders and investors, stimulating higher trading volumes and long-term holding.