Japan is preparing to reform the way it taxes cryptocurrency profits, moving toward a flat 20% tax that would bring digital assets in line with stocks and investment trusts, according to Nikkei.
The change marks the country’s biggest policy update for the sector in years and reflects a growing view among regulators that cryptocurrencies have matured into a mainstream investment class.
The proposal, backed by the government and ruling coalition, would place crypto profits under Japan’s separate taxation framework, where certain income streams are treated independently of salaries and business profits.
That structure divides the 20% share between the national government and regional authorities into 15% and 5% respectively. The change is expected to be included in the 2026 tax reform package finalized at the end of December.
Retail traders currently face progressive taxes that can reach up to 55% on crypto profits, a high burden that has long been cited as a deterrent to domestic activity.
The move comes as Japan’s regulated exchanges report steady growth, with the Japan Crypto and Virtual Asset Exchanges Association reporting that spot volumes on local exchanges surpassed $9.6 billion in September.
