Japan to Implement 20% Tax on Crypto Gains, Bringing Digital Assets in Line with Stocks

Japan is set to introduce a flat 20% tax on cryptocurrency gains in 2026, aligning it with stock taxation. This initiative aims to boost trading activity and attract investment in institutional products.

Key Takeaways

A flat 20% tax on cryptocurrency gains will be introduced in Japan in 2026.
This new tax structure will treat crypto similar to stocks, separating it from salary and business income.
The reform aims to stimulate trading and increase overall tax revenue.
Approximately eight million active crypto accounts exist in Japan.
Major asset management firms are adapting to the upcoming regulatory changes.

Japan 20% crypto tax reform boosts trading

Overview of the Upcoming Tax Reform

Japan is preparing to transform its approach to taxing cryptocurrencies by proposing a flat 20% tax on trading profits. This proposal is part of a report by Nikkei, highlighting the government’s intent to place digital assets on the same level as stocks and other conventional financial products.

Currently, profits from cryptocurrency trading are taxed at progressive rates that can reach 55%, depending on the individual's total income. With the new regulations, income from cryptocurrency will not be combined with personal earnings from salaries or business ventures. Instead, it will be assessed separately, with 15% of the gains going to the national government and 5% to local and prefectural governments.

Paving the Way for Increased Trading Activity

This tax reform is anticipated to be included in Japan's 2026 tax policy outline, which will be released later this year. Legislators supporting this initiative believe that lowering the tax burden could stimulate trading within the domestic market and ultimately lead to increased tax revenue. They also argue that this reform will encourage technological innovation, particularly among businesses focused on creating blockchain-related services.

Officials disclose that this shift in taxation reflects a wider government perspective: cryptocurrencies have matured into a recognized investment category rather than remaining a niche asset.

Active Participation in the Crypto Market

Recent statistics from the Japan Virtual and Crypto Assets Exchange Association reveal that there are roughly eight million active crypto accounts in Japan. To adapt to the upcoming regulatory landscape, major asset managers are forming dedicated teams to develop strategies. Notable firms such as Nomura Asset Management and Daiwa Asset Management are collaborating with specialists to adjust their offerings for both retail and institutional investors.

Challenges, including establishing pricing benchmarks, ensuring fast acquisition to align with investor demand, and building effective custody and security systems, are among the issues these asset managers face. The inherent volatility of digital assets continues to raise concerns.

In addition, the Financial Services Agency is working on measures that will encompass 105 cryptocurrencies traded within Japan, including major assets like Bitcoin Bitcoin and Ethereum , categorizing these digital currencies as financial products subject to insider trading laws.