"A uniform cryptoasset tax rate of 20%" The Japanese government is making final adjustments to transition to separate taxation | ETF deregulation is becoming a reality.

Source: Bittimes Original Title: “Uniform 20% Tax Rate on Crypto Assets” Japanese Government Finalizing Transition to Separate Taxation | Reality of ETF Deregulation Also Appears Original Link: https://bittimes.net/news/214368.html

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Government and ruling party finalize uniform 20% proposal

On December 1, 2025, it has become clear that the Japanese government and the ruling party are making final adjustments to transition to a separate taxation system that applies a uniform tax rate of 20% to income earned from cryptocurrency transactions.

The tax rate will be a total of 20%, consisting of a 15% income tax and a 5% individual resident tax, positioning it similarly to stocks and investment trusts.

According to the Nihon Keizai Shimbun, this review aims to be incorporated into the tax reform guidelines for the fiscal year 2026, and it is expected that institutional improvements regarding cryptocurrency assets will also be advanced alongside the tax reform.

The Financial Services Agency is planning to submit a proposal to amend the Financial Instruments and Exchange Act at the regular Diet session in 2026, which will include new regulations such as prohibiting insider trading and imposing information disclosure obligations on issuers.

The background for this system improvement lies in domestic cases of unauthorized outflows, and the outflow of 48.2 billion yen worth of Bitcoin (BTC) from DMM Bitcoin in 2024 has pushed discussions on strengthening investor protection.

Reconstructing the Framework for Cryptocurrency Regulation

Transition to Separate Taxation of Cryptocurrency Assets and System Reform Due to Amendments to the Financial Instruments and Exchange Act

The impact of 20% taxation on cryptocurrencies on the domestic market

According to the Nikkei newspaper, the revision of the tax system regarding cryptocurrency assets aims to stimulate the domestic market.

If a 20% separate taxation similar to stocks and investment trusts is applied, it may lead to increased trading activity due to reduced tax burden, which in turn could result in an expansion of tax revenue.

Furthermore, the fact that cryptocurrencies have become established as investment products is also a factor that promotes regulatory changes.

According to the Japan Virtual Currency Exchange Association (JVCEA), the number of active accounts in the country is approximately 8 million, and the spot trading volume is expected to reach around 1.5 trillion yen by September 2025, indicating an expanding market size.

The amendment to the Financial Instruments and Exchange Act indicates the financial productization of crypto assets.

The establishment of a system accompanying the introduction of separate taxation is essential, and the Financial Services Agency plans to tighten regulations through amendments to the Financial Instruments and Exchange Act.

On November 26, the Financial Services Agency published a draft report on the review of the regulatory framework for crypto assets, which includes the prohibition of trading based on non-public information and the introduction of disclosure obligations for issuers.

With the establishment of such systems, cryptocurrencies will be subject to the same regulations as existing financial products.

From the perspective of investor protection, strengthening the security of exchange operators is also a challenge, and specific measures based on recent cases of unauthorized leaks are required.

Signs of market expansion indicated by the lifting of investment trust restrictions and trends in ETFs.

Furthermore, the Nikkei Shimbun reports that the domestic legalization of investment trusts incorporating crypto assets is expected due to tax reforms.

Investment trusts targeting cryptocurrencies are increasing abroad, and the net asset balance of the Bitcoin ETF managed by the U.S. asset management giant BlackRock has reached approximately $70 billion (about 10 trillion yen).

If the system is improved domestically, it is expected that such products will be available for sale just like overseas, expanding the options for investors.

The Future of the 2026 Tax Reform Attracting Attention with the Introduction of Separate Taxation

The transition to separate taxation, which the government and ruling party are coordinating, is positioned as a system reform aimed at clarifying the tax burden and improving the investment environment.

In addition to these institutional reforms, it is believed that improving both the tax system and regulations will lead to an enhancement of the reliability of the domestic cryptocurrency market and the cultivation of related industries.

In the future, the contents of the tax reform outline for the fiscal year 2026 and the direction of the revised Financial Instruments and Exchange Act will be closely watched.