Japan is preparing a regulatory change that reclassifies 105 crypto-assets as “financial products”, extends market abuse rules and proposes a tax cut on cryptocurrency gains. The initiative, driven by the Financial Services Agency (FSA), was reported in mid-November 2025 and has key milestones in June 2026. The announcement affects retail and institutional investors, exchanges and financial entities that could distribute digital assets.
According to reports, the FSA proposes to include assets such as Bitcoin and Ethereum under the Financial Instruments and Exchange Act (FIEA), placing them within the same legal framework as stocks and bonds. That reclassification implies the application of rules on mandatory disclosure and market conduct, with the explicit extension of market abuse prohibitions —including insider trading— to operations related to listings, delistings or the financial situation of intermediaries.
The regulatory package incorporates a notable tax change: moving cryptocurrency gains from a progressive bracket that reached up to 55% to a flat 20% tax, comparable to the treatment of traditional securities. The proposed scheme adds the possibility to offset losses (loss carry-forwards), a measure designed to align the tax treatment of crypto with that of other instruments and facilitate tax planning for traders and managers.
Expected impact on market, products and compliance
The reclassification as a financial product could unlock approval of Bitcoin ETFs and other vehicles managed by traditional institutions. The new framework would also allow banks and insurers to distribute crypto through their securities subsidiaries, integrating traditional distribution channels with digital assets.
For compliance, the extension of market abuse rules requires operational adjustments. These include strengthened internal controls, greater disclosure requirements by issuers and markets, and an expansion of KYC/AML and custody processes to ensure traceability. For institutional managers, the tax cut and regulatory clarification can reduce capital costs and legal frictions, but also increase reporting obligations and regulatory supervision.
The report cites figures supported by the FSA that place Japan with more than 12 million crypto accounts and a potential of around $34.000 millones in latent assets that could enter the market if the tax and regulatory environment becomes more attractive.
The FSA has an agenda item at its General Council on June 25 and the measures are expected to take shape in fiscal year 2026. For product managers, compliance and investors, the next useful milestone is that meeting on June 25, which will define the implementation timetable and the specific regulatory obligations.
