Japan Moves to Allow Crypto ETFs and Cut Trading Tax Rate

Japan’s parliament has passed legislation bringing crypto assets under the Financial Instruments and Exchange Act, aligning their oversight more closely with securities such as stocks and investment funds. The shift creates a legal foundation for crypto exchange-traded funds and could broaden access for retail and institutional investors in one of the world’s largest pools of household savings.

The overhaul would replace Japan’s progressive crypto tax rate, which can reach about 55%, with a separate 20.315% levy comparable to that applied to listed securities. Crypto ETFs could debut as early as 2028. SBI estimates that an allocation of just 1% of Japanese household financial assets could create a market larger than the US crypto ETF sector, provided the products can be distributed through banks and post offices.

Japan has historically treated crypto assets primarily as payment instruments under the Payment Services Act, making it difficult to launch spot ETFs. Its regulatory framework has lagged behind those of the United States, which approved such products in January 2024, and Hong Kong, which followed in April 2024. The global stablecoin market is worth about $320 billion, but yen stablecoins have a market capitalization of less than 0.01% of their U.S. dollar counterparts, highlighting a strategic gap in onchain yen settlement.

The Liberal Democratic Party’s parliamentary alliance for blockchain promotion submitted five proposals covering crypto ETFs, yen stablecoins, taxation and leverage reform to Finance Minister Satsuki Katayama, who also oversees the Financial Services Agency, on June 1, 2026. Parliament passed amendments on July 15 that are expected to take effect in 2027 and pave the way for spot ETFs. The maximum tax rate on crypto income is also slated to fall from 55% to 20% in 2028.