Japan Plans 20% Tax on Crypto, Classifies as Financial Product

• Japan’s FSA proposes 20% flat tax on crypto gains
• Crypto to be legally treated as financial products
• Reform aims to boost Japan’s Web3 and crypto industry

In a landmark move, Japan’s Financial Services Agency (FSA) has proposed a major tax reform for the country’s crypto market. The proposal would classify cryptocurrencies as “financial products” and reduce the tax rate on crypto-related gains to a flat 20%.

This change is seen as part of Japan’s broader strategy to become a global hub for Web3 innovation, supporting both domestic blockchain startups and attracting international players.

20% Flat Tax: A Game-Changer for Investors

Under the current system, crypto gains in Japan are taxed as “miscellaneous income,” meaning individuals can pay up to 55% in taxes depending on their income bracket. The new FSA proposal seeks to drastically simplify and reduce this burden by applying a 20% flat tax—similar to how stocks and other financial instruments are taxed.

This reform would make Japan one of the more crypto-friendly countries in Asia, especially in contrast to stricter regimes in places like South Korea and China.

Legal Recognition of Crypto as Financial Products

Equally important is the move to legally recognize cryptocurrencies as financial products. This classification brings clarity to how crypto assets are regulated and may ease the development of compliant crypto services, including trading platforms, custody solutions, and investment products.

By doing so, Japan signals that it sees crypto not just as a speculative tool but as a legitimate part of the financial ecosystem.