Japan strongly promotes the integration of crypto assets into the exchange system: 105 tokens to reduce taxes, ETF prospects attract attention

Japan has sent clear positive signals regarding the regulation of cryptocurrencies and the integration with the financial sector. Recently, Japanese Finance Minister Shōzō Katō delivered a New Year’s address at the Tokyo Stock Exchange, stating that stock and commodity exchanges play a key role in opening digital asset and blockchain asset markets to the public. Japan should accelerate the integration of cryptocurrencies into the traditional financial system. This statement was interpreted by the market as an important endorsement from the Japanese authorities for the institutional development of digital assets.

Shōzō Katō pointed out that mature securities exchange infrastructure can help improve transparency, compliance, and investor participation in the digital asset market. Using the US market as an example, she emphasized that Bitcoin and other cryptocurrency ETFs have become important tools for investors to hedge inflation, implying that Japan may also make breakthroughs in this direction in the future. Currently, Japan has not yet launched a domestic cryptocurrency ETF, but related discussions are ongoing and gaining momentum.

At the policy level, Japan has initiated substantive reforms. The government plans to reclassify 105 mainstream cryptocurrencies, including Bitcoin and Ethereum, as “financial products” under the existing financial regulatory framework. This adjustment will not only promote the application of crypto assets in securities exchanges, institutional investments, and compliant financial scenarios but also lay the foundation for subsequent launches of crypto-related financial products.

More attention from the market is focused on the direction of tax reform. Japanese regulators are studying the possibility of lowering the top tax rate on cryptocurrency investments from the current 55% to around 20%, aligning it with stock investment tax rates. If implemented, this will significantly lower the barrier to crypto asset investments and enhance Japan’s attractiveness to global crypto funds and Web3 enterprises.

Additionally, the Financial Services Agency of Japan has been continuously sending positive signals over the past year, including discussions on allowing banks to hold and trade crypto assets, and approving the first yen-pegged stablecoin JPYC, demonstrating Japan’s systematic construction of a crypto financial ecosystem. Shōzō Katō also designated 2026 as the “Digital Year,” promising to support exchanges in utilizing cutting-edge technology to create innovative trading environments, while leveraging digital assets and growth industries to address long-term structural issues such as deflation.

Overall, Japan’s push to integrate cryptocurrencies into the securities exchange system, lower tax rates, and strengthen institutional regulation marks a shift from cautious defense to active guidance in its crypto policy. As the regulatory framework becomes clearer, Japan is expected to occupy a more important position in the Asian crypto financial landscape.