Overview
- Japan’s parliament approved the amendment on Wednesday that moves major cryptocurrencies out of the Payment Services Act and under the Financial Instruments and Exchange Act.
- Lawmakers also approved a plan to cut qualifying crypto gains to about a 20% flat tax with that tax treatment scheduled to begin in January 2028.
- The reclassification removes a structural legal barrier to domestic spot crypto ETFs but does not itself authorize any products and will require Financial Services Agency rulemaking and separate fund approvals.
- The new law expands disclosure duties for issuers and exchanges, creates insider-trading prohibitions for crypto, and raises penalties for unregistered operators to up to 10 years in prison and ¥10 million in fines.
- Practical effects hinge on government promulgation, FSA ordinances and JPX listing rules expected through fiscal 2027 and 2028, which will determine timing for ETF listings, reserve requirements and which assets qualify for the lower tax rate.