Japan crypto bill moves closer to final passage

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Japan advances crypto bill

Highlights

Japan’s House of Representatives approved changes to the Financial Instruments and Exchange Act.
Bitcoin, Ethereum, XRP and other tokens could be treated more like financial products.
Crypto tax could fall from as much as 55% to a fixed 20% from 2028.

According to CoinGape, Japan’s House of Representatives approved amendments to the Financial Instruments and Exchange Act on Thursday, sending the bill to the House of Councillors for a final vote.

Crypto moves into a stricter market framework

The proposed law would transfer much of Japan’s crypto oversight from the Payment Services Act to the Financial Instruments and Exchange Act. That would bring exchanges, issuers and related service providers closer to the rules already used in traditional securities markets, including disclosure duties, trading controls and stronger supervision.

The bill also introduces insider trading restrictions for crypto trading, similar to rules that apply to listed equities. Penalties for selling unregistered digital assets would be increased from three years to as much as 10 years. The new rules would also require issuers to publish annual disclosures and give Japan’s Securities and Exchange Surveillance Commission broader authority to police misconduct.

Tax and ETF expectations rise

The tax changes may be the most visible part of the reform for retail investors. Crypto profits in Japan are currently taxed under a progressive system that can reach 55%, while the proposed framework would move qualifying crypto gains toward a fixed 20% rate from 2028, if the bill is approved.

The classification shift could also open the door to spot Bitcoin ETFs and other crypto exchange-traded funds in Japan. Japan Exchange Group is targeting the launch of Bitcoin and broader crypto ETFs by 2027, a move that could support companies tied to institutional digital asset products.

For crypto firms, the bill could reduce uncertainty by creating a more uniform set of rules. At the same time, it would raise compliance costs for exchanges, issuers, wallet providers and investment advisers that have operated under a lighter or more fragmented framework.

A signal for institutional crypto in Japan

The legislation matters because Japan is trying to make crypto more investable while tightening market discipline. A 20% tax rate would bring crypto gains closer to the treatment of stocks, while insider trading rules and tougher penalties could make the market more acceptable to institutional investors.

The reform may also help domestic financial groups expand digital asset products. SBI Holdings, a Ripple affiliate, has already been growing its crypto business, including Solana trading and custody services through SBI VC Trade.

Earlier, we reported that Japan's banking giants advanced a stablecoin plan for 2027.

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