Japan is preparing to overhaul how it taxes cryptocurrency gains, moving toward a flat 20% levy that would bring digital assets in line with stocks and investment trusts, according to Nikkei.
The change marks the country’s most significant policy update for the sector in years and reflects a growing view among regulators that crypto has become a dominant investment class.
The proposal, backed by the government and ruling coalition, would place crypto profits within Japan’s separate tax framework, where certain income streams are treated independently of wages and corporate profits.
This structure distributes the 20% between the national government and regional authorities at 15% and 5% respectively. This change should be included in the 2026 tax reform package finalized at the end of December.
Retail traders currently face progressive taxation that can reach up to 55% on crypto gains, representing a high burden that has long been cited as a deterrent to domestic activity.
The move comes as Japan’s regulated exchanges report steady growth, with the Japan Virtual and Crypto Assets Exchange Association reporting spot volumes on local exchanges exceeding $9.6 billion in September.
