Countries around the world continue to regulate cryptocurrencies. The latest news comes from Japan.
According to Bloomberg, Japan’s House of Representatives has passed a bill that classifies cryptocurrencies as financial products similar to stocks and reduces their tax rate to 20% starting in 2028.
At this point, the lower house of the Japanese parliament approved the legislation and sent it to the upper house for consideration. The bill needs to be reviewed by the Council of State before final approval. It is then expected to come into effect next year.
Under current law, cryptocurrency profits in Japan are taxed at a maximum rate of 55%. The proposed change reduces cryptocurrency taxes nationwide from 55% to a flat 20%.
The most significant point of the amendment to the Financial Instruments and Exchanges Act is said to be classifying cryptocurrencies like Bitcoin and Ethereum as financial products similar to traditional securities.
With this change, cryptocurrencies will also be classified as financial products similar to stocks. This step will allow cryptocurrency ETFs, including Bitcoin and Ethereum, to be traded in the country. Furthermore, this will reduce the tax on crypto capital gains from the current maximum rate of 55% to a fixed 20%, the same level as stocks and bonds. The tax change is expected to take effect in 2028.
Masato Yoshizawa, an official at the Policy and Markets Bureau of Japan’s Financial Services Agency, stated that the aim of the regulations is to encourage innovation by creating a robust trading environment.
*This is not investment advice.
