According to Nikkei, Japan has just announced its 2026 tax reform plan, which includes a notable change to cryptocurrency tax policy. Under the new proposal, the tax rate on profits from crypto will be drastically reduced to a fixed rate of 20%, instead of the current rate which can reach up to 55%.
Currently, profits from cryptocurrency trading in Japan are classified as miscellaneous income and are subject to very high progressive taxes. This tax rate is considered a major reason for the decline in domestic crypto trading activity, and it has prompted many individuals and blockchain startups to relocate their operations overseas.
Applies only to eligible Crypto
However, the key point in the reform is that the 20% tax rate does not apply universally to the entire crypto market. According to Nikkei, the new policy only applies to certain specific digital assets traded through businesses registered in the Financial Instruments Business Operators Registry – the regulatory framework for licensed financial institutions in Japan.
Accordingly, profits from eligible cryptocurrencies will be taxed under the same mechanism as stocks and investment funds, instead of being separated as before. Major cryptocurrencies like Bitcoin and Ethereum are considered likely to be on the eligible list, but the specific criteria for businesses and asset types remain unclear.
Two-way impact on the market
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Observers believe this tax reform is a positive signal for the Japanese crypto market, particularly in efforts to attract Capital and restore domestic trading activity. Bringing crypto under the same tax framework as traditional financial products also shows that the Japanese government is gradually considering digital assets as a mainstream investment asset class.
However, limiting the scope of application could lead to market fragmentation. Assets and platforms that meet the legal requirements will clearly benefit, while projects or Token outside the list may continue to face high taxes, reducing their attractiveness to individual investors.
A cautious but strategic move.
