The Financial Services Agency (FSA) of Japan has suddenly proposed a significant reform plan: to officially classify 105 mainstream cryptocurrencies such as Bitcoin and Ethereum as financial products, bringing them under the regulatory framework of the Financial Instruments and Exchange Act. More importantly, the tax system will be adjusted from a progressive tax on miscellaneous income of up to 55% to a unified capital gains tax of 20%, similar to that of stocks. This means that the tax burden for high-frequency traders and high-income investors could be cut in half.
In-depth analysis of policies
Regulatory upgrade: The FSA will establish a whitelist for token reviews, with evaluation criteria including project transparency, technical safety, and market credibility. Similar insider trading restrictions like those in the stock market may also be introduced in the future.
Time window: The proposal plans to be included in the budget review for the fiscal year 2026, which is a directional signal in the short term, and in the long term, it will open the channel for compliant institutional funds to enter.
Global Competition: Japan is clearly following the cryptocurrency policies of Hong Kong and Singapore, attempting to seize the position of a compliant cryptocurrency financial center in East Asia.
Direct impact on investors
Long-term holders will see a significant reduction in tax burden, especially among high-net-worth individuals with annual incomes exceeding 10 million yen.
Institutions can legally allocate cryptocurrency assets, and mainstream funds such as insurance and pensions are expected to enter the market.
The standards for listing on exchanges are becoming stricter, and the survival space for junk coins is being compressed.
Experienced Strategies
Focus on whitelist cryptocurrencies: advance layout of the 105 tokens that may be selected, especially those with existing local community foundations in Japan.
Layout compliant exchanges: The flow and currency selection rights of licensed exchanges in Japan (such as bitFlyer and Coincheck) will be enhanced.
Avoid risk coins: Projects lacking transparent documentation and anonymous teams may be excluded from the list.
Long-term perspective: The period before 2026 is a policy dividend window, and compliant positions can be gradually established.
Risk Warning
Before the policy is implemented, the market may over-speculate on whitelist expectations.
The entry of traditional financial institutions may exacerbate market volatility.
Strict regulation may suppress the innovative vitality of small cryptocurrencies.
Summary
Japan's policy shift this time marks a new phase of mainstream finance's acceptance of cryptocurrency assets. In the short term, it is a tax reduction benefit, and in the long term, it represents the integration of traditional financial infrastructure with the cryptocurrency world. Smart money has already begun to take action.
