Japan’s Financial Services Agency (FSA) has unveiled a significant proposal on June 24 to bring crypto assets under the Financial Instruments and Exchange Act (FIEA).
The changes will govern crypto with the same framework that governs traditional securities.
Japan’s Crypto Reform Targets Legal Clarity, Investor Protection, and Institutional Access
The move aims to provide stronger legal clarity, investor protection, and institutional access to digital assets.
The proposal will be reviewed by the Financial System Council on June 25. If approved, it could pave the way for Bitcoin Exchange-Traded Funds (ETFs) to be introduced in Japan for the first time.
A key element of the proposal includes a reform in crypto taxation, shifting from the current progressive tax regime of up to 55% to a flat 20% capital gains tax.
This change would align crypto with how equities and investment trusts are taxed, making the asset class more attractive to both retail and institutional investors.
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Japan’s Crypto Overhaul Follows Surge in Retail Adoption and Investor Demand
This regulatory shift comes as Japan sees a surge in its crypto user base, with more citizens turning to digital assets for trading and investment.
By formalizing crypto within financial law, Japan aims to become a global leader in regulated crypto markets, balancing innovation with oversight while encouraging the development of compliant crypto products, such as ETFs and institutional trading platforms.
If Japan successfully brings crypto assets under the Financial Instruments and Exchange Act (FIEA), it could mark a major turning point for the country’s digital asset landscape.
The move would make crypto investing far more attractive for both retail and institutional investors. Additionally, the change could lift the existing ban on Bitcoin ETFs, enabling greater market participation and improved financial product offerings.
Institutional investors, in particular, would gain regulated access to crypto markets through ETF vehicles.
Moreover, the transition to FIEA would bring crypto under a stronger investor protection framework, ensuring better transparency, disclosure, and oversight—further reinforcing Japan’s role as a forward-thinking, crypto-friendly jurisdiction.
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Japan’s Crypto Reforms Align with Strategy to Become Investment-Driven Nation
Japan’s latest crypto regulation push is part of its broader strategy to transform into an investment-driven nation.
By integrating digital assets into its formal financial system, the government aims to create new economic value through innovation in the Web3 and cryptocurrency sectors.
The initiative is designed to expand opportunities for citizens to build wealth, not just through traditional investments but also via digital asset markets.
By developing a comprehensive and secure regulatory environment, Japan seeks to boost public participation, attract institutional interest, and position itself as a global leader in blockchain-based finance and the next generation of digital economic infrastructure.
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