On June 24, 2025, Japan's Financial Services Agency (FSA) unveiled a formal proposal to radically reform crypto regulations. The plan seeks to reclassify cryptocurrencies under the Financial Instruments and Exchange Act (FIEA) instead of the current Payment Services Act. This move would officially categorize crypto assets as financial products and grant them enhanced investor protections.
Key features of the reform include allowing Bitcoin exchange-traded funds (ETFs) to be listed on Japanese exchanges, a landmark change that could open Japan’s market to both institutional and retail crypto investors. Additionally, the proposal aims to reduce the capital gains tax on crypto earnings from a steep progressive rate (up to 55%) to a flat 20%, aligning crypto taxation with stock investments.
This overhaul reflects a significant shift from Japan’s historically cautious approach to digital assets and is part of a broader national 'New Capitalism' strategy promoting investment-driven economic growth and the development of Web3 and NFT infrastructure. The reform also responds to geopolitical trends toward regulatory clarity, taking cues from pro-crypto developments in the U.S.
Industry players like Tokyo-listed Metaplanet, which recently injected $5 billion into its U.S. subsidiary for Bitcoin acquisition, may find the prospect of domestic-friendly regulations compelling enough to scale their crypto operations in Japan again. The FSA's proposal is under consideration by the Financial System Council as of June 25, marking a potential historic turning point toward Japan becoming a global hub for crypto investment.
Additionally, the FSA plans to categorize crypto assets into two types: Type 1 tokens related to fundraising subject to strict disclosure rules, and decentralized Type 2 tokens such as Bitcoin (BTC) and Ethereum (ETH) monitored primarily via exchange oversight.