Japan crypto bill clears ETF and tax hurdle

Japan's Lower House has reportedly passed legislation that would bring cryptocurrency assets under the country's financial instruments framework, potentially opening the door to crypto exchange-traded funds and lower tax rates for investors.

The bill would move digital assets closer to the regulatory treatment of stocks and bonds, with capital gains taxes on cryptocurrencies such as Bitcoin and Ether potentially falling from a maximum of 55% to a flat 20% rate from 2028.

The legislation would also place crypto assets under stricter financial market rules, including enhanced disclosure requirements, tighter exchange oversight and insider trading restrictions.

The parliamentary advance follows months of indications that Japan intends to shift crypto regulation away from a payment-focused model and towards a financial-market framework.

The Financial Services Agency previously indicated that crypto assets, including Bitcoin and Ether, would be regulated under the Financial Instruments and Exchange Act rather than the Payment Services Act.

Under the proposed framework, crypto assets would be treated as financial products distinct from securities while remaining subject to enhanced investor protection and compliance standards.

The changes could also create a pathway for crypto-tracking ETFs in Japan, providing investors with a regulated method of gaining exposure to digital assets through traditional financial markets.

Official records showed the bill cleared the Committee on Financial Affairs on June 10, with the legislation expected to take effect next year after progressing through Japan's Upper House.

At the time of reporting, Bitcoin price was $63,565.83.