Japan may lift ban on Bitcoin ETFs by classifying crypto as financial products
Japan is changing regulation
The Financial Services Agency of Japan (FSA) is considering classifying cryptocurrencies as financial instruments, similar to securities, to require companies to disclose more information and enhance investor protection.
According to Nikkei, the FSA is currently holding closed-door consultations with experts to assess whether the existing regulatory framework is sufficient to oversee the digital asset market.
The agency is expected to present a system reform plan in June this year. Following discussions at the Financial System Council in the fall, relevant legislative amendments will be submitted to the Japanese parliament in 2026. Potential changes include lifting the ban on spot Bitcoin ETFs and reducing the crypto tax from 55% to 20%, aligning it with the financial income tax rate. Authorities are also debating whether the new rules should apply to the entire cryptocurrency market or only to assets approved in the U.S., such as Bitcoin and Ethereum.
Meanwhile, an expert group established by the FSA has concluded that cryptocurrency is increasingly viewed as an investment asset. This could be a response to the recent approval of Bitcoin and Ethereum ETFs in the U.S., as well as the Trump administration’s support for the crypto industry.
Cryptocurrency regulation in Japan
Japan was one of the first countries to implement comprehensive cryptocurrency regulations. In 2017, authorities officially recognized Bitcoin and other digital assets as legal payment methods, introducing strict oversight of cryptocurrency exchanges. All platforms dealing with digital assets must register with the Financial Services Agency (FSA) and comply with rules aimed at protecting users.
Companies are required to maintain a high level of cybersecurity, separate client and corporate funds, and undergo regular audits. Additionally, in 2020, the Payment Services Act came into effect, imposing new licensing requirements on crypto companies and restricting margin trading.
According to Japanese media, Finance Minister Katsunobu Kato has pledged to complete the approval process for Japan’s cryptocurrency tax reform by the end of June 2025.
