Japan’s ruling Liberal Democratic Party (LDP) has proposed a significant reduction in the tax rate on crypto gains in an effort to overhaul its crypto tax regime.
In a draft released Thursday, LDP lawmaker Akihisa Shiozaki introduced a plan to reduce the tax rate on crypto gains from 55% to 20%.
自民党・デジタル社会推進本部にてweb3WGの制度改正案が公表。暗号資産を金商法上の有価証券とは異なる新たなアセットクラスとして位置付け、市場の発展、投資家保護、分離課税を実現する案です。なお、制度改正案については、3月31日まで広く皆さまのご意見・提案を募集します。（資料は↓のWGブログ… pic.twitter.com/CEc1f9wiPe
— 塩崎あきひさ 【衆議院議員・愛媛1区】 (@AkihisaShiozaki) March 6, 2025
The proposal seeks to reclassify crypto as a distinct asset class under the Financial Instruments and Exchange Act, moving them away from their current classification under the Payment Services Act.
The shift means crypto would not be treated as securities and as a separate category of financial products, potentially offering clearer tax rules and more tailored regulations for the crypto industry.
Describing the news as a “big day” for Japan, Sota Watanabe, CEO of Web3 infrastructure company Startale, tweeted that he was, “100% sure” that crypto adoption among Japanese people would increase as a result.
Watanabe mentioned the Japanese government has been speaking with industry leaders in Japan and how this is a “great outcome of collaborations.”
The LDP is now collecting public feedback on the proposal until March 31 before submitting it to the Financial Services Agency (FSA) for further review.
Japan and crypto
Amid these reforms, Japan’s government is taking a measured approach toward more daring crypto initiatives.
In December 2024, Prime Minister Shigeru Ishiba expressed skepticism about the adoption of a Bitcoin strategic reserve, citing insufficient information about the plans of the U.S. and other countries.
His comments came in response to a proposal from Satoshi Hamada, a member of Japan’s House of Councilors, who suggested Japan should consider converting some of its foreign reserves into Bitcoin.
On Thursday, U.S. President Donald Trump signed an executive order authorizing the establishment of a government-held Bitcoin stockpile, which will be funded by assets seized during criminal or civil asset forfeiture proceedings.
On the other hand, Japan’s FSA is considering lifting the long-standing ban on crypto ETFs, with discussions expected to continue through 2025 before a legislative proposal is submitted in 2026.
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