Japan Eyes Crypto ETFs, 20% Tax in Regulatory Overhaul
Japan's Financial Services Agency (FSA) proposed reclassifying cryptocurrencies as "financial products" under the Financial Instruments and Exchange Act, facilitating the launch of crypto exchange-traded funds (ETFs) and introducing a flat 20% tax on digital asset income. This change aims to replace the current progressive tax system, which can reach up to 55%, making crypto investing more appealing. The proposal aligns with Japan's "New Capitalism" strategy to enhance its investment-led economy. Over 12 million active crypto accounts exist in Japan, with assets exceeding 5 trillion yen ($34 billion). Crypto ownership has surpassed some traditional financial products among tech-savvy investors. The FSA noted increasing institutional engagement, with over 1,200 financial institutions holding US-listed spot Bitcoin ETFs. Additionally, a collaboration involving SMBC, TIS Inc., Ava Labs, and Fireblocks aims to explore stablecoin commercialization in Japan, focusing on stablecoins pegged to the US dollar and Japanese yen.
