Japan Moves Closer to Classifying Cryptocurrencies as Financial Instruments

Japan has taken another step toward reshaping its crypto regulations after the country’s lower house advanced a bill that would classify digital assets as financial instruments. The proposal was approved by the House of Representatives’ Finance and Financial Affairs Committee on June 10 and now moves to the upper house, the House of Councillors, for further consideration.

If approved, the legislation is expected to take effect next year and could significantly change how cryptocurrencies are regulated and taxed in Japan.

Crypto Assets Could Be Regulated Like Stocks

Under the proposed framework, cryptocurrencies would be treated similarly to traditional financial instruments such as stocks and bonds. This would place the sector under stricter trading and disclosure rules while creating the possibility of more favorable tax treatment.

Currently, crypto gains in Japan can be taxed at rates as high as 55%. The new framework could reduce that burden to a flat 20%, aligning crypto taxation with stocks and other financial assets.

Japan Expands Its Digital Asset Strategy

The move reflects Japan’s growing focus on digital assets and blockchain innovation. The Financial Services Agency currently regulates crypto mainly under the Payment Services Act, treating it primarily as a payment method.

The country’s stablecoin sector has also gained momentum. Following regulatory reforms in 2023, fintech company JPYC launched Japan’s first legally recognized yen-backed stablecoin. Earlier this year, SBI Holdings and Startale Group introduced JPYSC for institutional and cross-border transactions.

Japan’s major banking groups, including MUFG Bank, Mizuho Bank and SMBC, are also preparing to launch commercial transactions using a jointly issued stablecoin before March 2027. Meanwhile, SBI Shinsei Bank plans to introduce a crypto rewards program for deposit customers later this year.