Japan is preparing to overhaul how it taxes cryptocurrency gains, moving toward a flat 20% tax that would bring digital assets in line with stocks and mutual funds, according to the Nikkei.
The shift marks the country’s most significant policy update for the sector in years and reflects a growing perception among regulators that crypto has matured into a mainstream investment class.
The proposal, backed by the government and the ruling coalition, would place crypto profits under Japan’s separate taxation framework, where certain income streams are treated independently of wages and business earnings.
This structure divides the 20% tariff between the national government and regional authorities with 15% and 5% respectively. The change is expected to be written into the 2026 tax reform package that will be finalized at the end of December.
Retailers currently face progressive taxation that can reach as high as 55% on crypto gains in a steep burden long cited as a deterrent to domestic activity.
The shift comes as Japan’s regulated exchanges report steady growth, with the Japan Virtual and Crypto Assets Exchange Association reporting spot volumes on local exchanges crossed $9.6 billion in September.
