Japan FinMin Kato: aware of reported plan on new tax, no specific plan in mind to use this as a new funding source

Japan FinMin Kato: aware of reported plan on new tax, no specific plan in mind to use this as a new funding source

Japan's Finance Minister Katsunobu Kato has spoken on two significant financial developments. First, he has endorsed cryptocurrencies as legitimate diversified investment tools, despite their volatility. Second, he has acknowledged a new tax plan for crypto assets but has not indicated plans to use the potential tax revenue as a new funding source.

Cryptocurrencies as Diversified Investments

Minister Kato's stance on cryptocurrencies reflects a broader shift in Japan's approach to digital assets. He stated that with the right regulatory and investment environment, crypto assets can serve as a tool for portfolio diversification [1]. This position aligns with Japan's ongoing efforts to refine its regulatory framework and market infrastructure to support the growing crypto sector.

The Finance Minister's comments were made at the WebX2025 digital assets forum in Tokyo, where he emphasized the need for regulatory oversight while encouraging financial innovation. Japan's debt-to-GDP ratio surpassing 200% has raised concerns about potential financial repression and currency depreciation, making cryptocurrencies an attractive hedge against macroeconomic uncertainties.

Proposed Tax Reforms for Crypto Assets

In response to the growing interest in cryptocurrencies, Japan's Financial Services Agency (FSA) has proposed a revision to the taxation of crypto assets. The current system classifies crypto gains as "miscellaneous income," subject to tax rates ranging from 15% to 56%. The FSA has suggested a flat tax rate of approximately 20.315%, mirroring the treatment of stock market gains [3]. This reform aims to simplify compliance for investors and promote broader adoption of digital assets in Japan's financial system.

Market reactions to these developments have been positive. For instance, Metaplanet, a Japanese Bitcoin treasury firm, was upgraded from a small-cap to a mid-cap stock in the FTSE Russell’s September 2025 Semi-Annual Review, indicating growing institutional interest in crypto-related assets [4]. Additionally, major financial players in Japan, such as SBI Group, have expanded their blockchain partnerships, working with platforms like Chainlink and Ripple to develop new financial tools for Asian markets [5].

Hypersonic Missiles Funding

Separately, the Japan Ministry of Defense has allocated funds within the approved military budget for 2026 to begin serial production of the new HVGP Block 1 hypersonic missiles. The new missiles are set to be integrated into anti-ship systems and will provide Japan’s Ground Self-Defense Forces with the capability to strike targets at a range of 500-600 km [2].

The funding for these programs includes $2.07 billion for the deployment of serial production and another $5.03 billion for the development of an improved version, HVGP Block 2. The exact number of missiles to be ordered has not been disclosed, but they are intended to equip at least four missile regiments. The initial contract for preparing for the serial production of the HVGP Block 1 was signed back in 2023.

Conclusion

Minister Kato's endorsement of cryptocurrencies as a legitimate diversified investment tool signals Japan's strategic shift towards balancing regulatory oversight with financial innovation. The proposed tax reforms aim to simplify crypto gains taxation, which could boost investor compliance and market growth. Meanwhile, the funding allocated for hypersonic missiles underscores Japan's commitment to enhancing its defense capabilities. While the new tax plan for cryptocurrencies has been acknowledged, there is no specific plan in mind to use this as a new funding source.

References

[1] Japan's Finance Minister Says Crypto Assets Can be Part of Diversified Portfolio. (2025, August 21). CoinDesk. [https://www.coindesk.com/markets/2025/08/25/japan-s-finance-minister-says-crypto-assets-can-be-part-of-diversified-portfolio](https://www.coindesk.com/markets/2025/08/25/japan-s-finance-minister-says-crypto-assets-can-be-part-of-diversified-portfolio)

[2] Japan Funds Development of First Domestic Hypersonic Missiles HVGP Block 1. (2025, August 21). Militarnyi. [https://militarnyi.com/en/news/japan-funds-development-of-first-domestic-hypersonic-missiles-hvgp-block-1/](https://militarnyi.com/en/news/japan-funds-development-of-first-domestic-hypersonic-missiles-hvgp-block-1/)

[3] Japan’s crypto tax overhaul: What investors should know in 2025. (2025, July 10). Cointelegraph. [https://cointelegraph.com/news/japanese-regulator-halves-taxes-on-crypto](https://cointelegraph.com/news/japanese-regulator-halves-taxes-on-crypto)

[4] Metaplanet Upgraded to Mid-Cap Stock in FTSE Russell Review. (2025, September 20). FTSE Russell. [https://www.ftserussell.com](https://www.ftserussell.com)

[5] SBI signs new blockchain partnerships. (2025). Coinpedia. [https://coinpedia.org/crypto-live-news/japan-backs-crypto-as-part-of-diverse-investments/](https://coinpedia.org/crypto-live-news/japan-backs-crypto-as-part-of-diverse-investments/)