The Financial Services Agency of Japan (FSA) plans to classify 105 types of cryptocurrencies, including Bitcoin and Ethereum, as financial products under the Financial Instruments and Exchange Act in 2026. This move will shift profits from cryptocurrency trading from the mixed income category to capital gains, applying a fixed tax rate of 20%, similar to stock trading.
The consolidation of the tax framework is expected to reduce the burden on investors, increase transparency, and boost market liquidity. Analysts believe that this change could attract more institutional money, especially in the context of Japanese financial companies expanding their digital asset services.
The FSA stated that reclassification will help connect cryptocurrency with traditional financial services, making it easier and safer for customers to access digital assets.