- Japan advanced legislation that would regulate cryptocurrencies like traditional stocks.
- Proposed reforms could reduce crypto taxes from 55% significantly.
- Major banks target stablecoin transactions and governance framework launch.
Japan is moving closer to regulating cryptocurrencies like stocks, following the approval of a key bill by the House of Representatives’ Finance and Financial Affairs Committee. The legislation, submitted by the cabinet in April, would classify crypto assets as financial instruments under Japanese law. If the House of Councillors approves the proposal, the new framework could take effect next year, bringing digital assets under stricter trading regulations while potentially lowering taxes on crypto gains.
Under the proposed rules, cryptocurrencies would no longer be treated primarily as payment instruments. Instead, authorities would regulate them under a framework similar to that used for stocks and other investment products. Consequently, crypto companies and investors would face broader oversight from financial regulators.
The proposed reclassification could also deliver a major tax change. Currently, profits from cryptocurrency investments can face tax rates of up to 55% in Japan. However, the new structure could reduce that burden to a flat 20%, aligning crypto taxation with stocks and bonds. Japan’s Financial Services Agency currently supervises digital assets through the Payment Services Act. That approach largely views cryptocurrencies as payment tools. The new legislation signals a shift toward recognizing them as investment assets within the country’s financial system.
Also Read: Bithumb CEO Under Police Investigation in Lawmaker Hiring Scandal
New Framework Could Expand Investor Participation
Lawmakers are advancing the bill at a time when Japan’s digital asset market continues to mature. Clearer regulations and growing institutional involvement have strengthened the country’s position as one of Asia’s most active crypto markets. A financial instrument classification could provide investors with greater regulatory clarity. Moreover, lower tax rates may encourage wider participation from both retail and institutional investors. The proposal could also create conditions for additional crypto-related financial products in the future.
Authorities have increasingly focused on creating rules that balance innovation with investor protection. As a result, Japan continues to refine its legal framework while supporting growth across the digital asset sector. Japan has already taken significant steps to establish a regulated stablecoin market. In 2023, amendments to the Payment Services Act introduced the concept of electronic payment instruments, creating a legal foundation for stablecoin issuance and management.
Since then, several major projects have entered the market. JPYC Inc. launched JPYC in October 2025, becoming the country’s first legally recognized yen-backed stablecoin. Additionally, SBI Holdings and Startale Group unveiled JPYSC earlier this year for institutional and cross-border transactions.
Major Banks Advance Joint Stablecoin Project
Japan’s stablecoin ambitions continue to expand through participation from the country’s largest banking groups. As reported by 36Crypto yesterday, MUFG Bank, Mizuho Bank, and Sumitomo Mitsui Banking Corporation plan to begin commercial stablecoin transactions by March 2027 through a jointly issued digital currency initiative.
The three institutions stated that the stablecoin will operate under a trust structure. Under that model, each bank will act as a joint settlor, while a trust bank or similar financial institution will serve as the trustee overseeing the project.
Moreover, the banks intend to launch live stablecoin transactions during fiscal year 2026, which runs through March 2027. They noted that the initiative could support a wide range of future payment and settlement activities across the financial sector.
To prepare for the rollout, the institutions have agreed to establish a council responsible for examining governance standards and operational frameworks. The group will also help develop the infrastructure required before the stablecoin enters commercial use.
Broader Crypto Integration Gains Momentum
Meanwhile, SBI Shinsei Bank intends to launch a crypto rewards program for deposit customers later this fall. These initiatives highlight growing confidence among financial institutions as digital assets become more integrated into mainstream financial services.
In conclusion, Japan’s latest legislative effort reflects a broader strategy to bring cryptocurrencies under a regulatory structure similar to traditional financial assets while supporting continued industry development.
Also Read: Alert: 923,000,000 XRP Now Locked by Institutions – Here’s What You Should Know
