Bitcoin News Today: Japan to Reclassify Crypto as Financial Assets Under New Tax Overhaul

Japan’s proposed cryptocurrency tax overhaul is set to reshape the investment landscape for digital asset holders in the country. On June 24, 2025, Japan’s Financial Services Agency (FSA) announced a plan to reclassify crypto assets as financial products, aligning them with traditional assets like equities and bonds under the Financial Instruments and Exchange Act (FIEA) [1]. This move is part of the broader “New Capitalism” initiative, aimed at transforming Japan into an investment-driven economy [1].

Under the current tax system, all crypto profits are categorized as “miscellaneous income,” subjecting them to progressive income tax rates ranging from 5% to 45%, with an additional 10% local inhabitant tax, pushing the effective top rate to 55%—among the highest in the world [1]. The proposed reform would treat crypto gains similarly to traditional investments, allowing for loss carry-forwards that can offset future gains over a three-year period. This shift is expected to provide greater flexibility for investors, particularly in the volatile crypto market [1].

The overhaul also clarifies which activities trigger tax obligations. These include selling crypto for fiat currency, swapping between cryptocurrencies, using crypto for purchases, and earning crypto through mining, staking, or airdrops. Notably, holding or transferring crypto between wallets does not constitute a taxable event [1].

The proposed changes are part of Japan’s long-term efforts to regulate its crypto sector, which began in earnest after the 2014 Mt. Gox collapse. Over the years, the FSA has progressively introduced stricter anti-money laundering (AML) and cybersecurity requirements, approved regulated exchanges, and established self-regulatory bodies like the Japan Virtual Currency Exchange Association (JVCEA) [1]. A significant milestone came in 2017 when Japan became the first country to legally recognize Bitcoin as a payment method.

Comparatively, Japan’s proposed tax structure is expected to become more investor-friendly than those in the U.S. and U.K., which maintain complex capital gains tax frameworks for crypto [1]. If implemented in 2026, the reform could position Japan as a global hub for digital asset investment, reinforcing its leadership in blockchain innovation.

Meanwhile, Japanese corporations are also expanding their crypto holdings. On July 7, 2025, Metaplanet, a corporate Bitcoin treasury company, became the fifth-largest Bitcoin holder in the country by purchasing 2,204 BTC, bringing its total holdings to 15,555 BTC. The company plans to use its Bitcoin reserves to acquire profit-making businesses, including a digital bank in Japan [1]. Other major corporate holders include Nexon, Remixpoint, and ANAP Holdings.

Investors are being urged to prepare for the upcoming changes by maintaining detailed transaction records and staying informed about regulatory updates. Once enacted, the new tax regime could significantly alter the way crypto is taxed in Japan, offering greater clarity and fairness to investors.

Source: [1] Japan’s crypto tax overhaul: What investors should know in 2025 (https://cointelegraph.com/explained/japans-crypto-tax-overhaul-what-investors-should-know-in-2025)