Japan approves crypto market reform, but tax cut may wait

Japan has approved the crypto market reform traders were watching, but the lower tax rate may still take time. On July 15, Japan's House of Councilors passed Cabinet Bill 57, completing Diet approval for a shift of regulated crypto activity into the Financial Instruments and Exchange Act (FIEA).

That change gives crypto a securities-style compliance framework without classifying it as a security. According to Financial Services Agency materials, the new regime covers disclosure and registration for crypto sales, issuer-led token offerings and borrowing, along with asset screening, custody rules, customer protections, and insider trading controls. Exchanges and intermediaries can start preparing now, though the detailed requirements still depend on Cabinet orders and FSA ordinances.

The timing matters for taxes. Japan already enacted the fiscal 2026 tax amendments on March 31, including a 20% rate for qualifying crypto gains. But those tax rules stay inactive until the FIEA provisions begin. If the Cabinet starts enforcement in 2026, the new tax treatment would apply from Jan. 1, 2027. If enforcement slips into 2027, the start moves to Jan. 1, 2028.

The 20% rate applies only to eligible tokens sold through registered crypto businesses and listed on Japan's official register. Losses in the same tax category can be carried forward for three years, subject to conditions.