Japan Regulator Plans 20% Crypto Tax To Boost Competitiveness

Japan’s Financial Services Agency (FSA) will push for taxes on crypto to be slashed as it moves to make the industry more competitive.

Under a proposal by the regulator that was reported by Nikkei, taxes on crypto would move into a separate bracket with a flat 20% rate. Income from crypto is now treated as “miscellaneous income” and there is a progressive tax rate of up to 55%, excluding local taxes.

The change would align crypto with the way listed stocks are taxed. A review is scheduled for the end of the month and industry groups are also pushing for a three-year loss carry-forward that would help reduce volatility in annual tax treatment.

Japan To Make It Easier To Launch Crypto ETFs

The change would ease one of the heaviest burdens on Japan’s crypto firms and reduce pressure on them to shift activity to crypto-friendlier overseas markets.

The FSA has also submitted a proposal that would make it easier for firms to launch domestic crypto ETFs (exchange-traded funds).

In addition to the tax code review, the FSA is planning a 2026 legislative bill to bring crypto under the Financial Instruments and Exchange Act as a “financial product.” Currently, crypto is regulated as a “means of payment” under the Payment Services Act. 

That shift comes as Japan’s FSA plans to approve the country’s first domestically regulated stablecoin backed by the yen, called JPYC. The stablecoin’s issuer, JPYC, is a Tokyo-based fintech company, who aims to issue 1 trillion yen, around $6.78 billion, worth of the token across three years. 

Metaplanet Looks To Take On Japan’s Bond Markets

While the FSA plans to make changes to the tax code’s handling of crypto, Japan-based Metaplanet is looking to take on the country’s bond markets.

Metaplanet is often regarded as “Japan’s MicroStrategy” due to its aggressive accumulation of Bitcoin. It’s currently the largest corporate holder of the crypto in Asia, with its reserves of 18,888 BTC, according to data from Bitcoin Treasuries. 

Top 10 largest BTC treasury firms (Source: Bitcoin Treasuries)

Its Bitcoin holdings also rank Metaplanet at number seven on the list of the biggest BTC treasury firms. 

What’s more, the company is less than 400 BTC away from overtaking Riot Platforms as the sixth largest corporate Bitcoin holder. 

To double down on its Bitcoin strategy, Metaplanet announced earlier this month that it is rolling out a BTC-backed yield curve as well as a preferred share program aimed at making BTC a credible form of collateral in Japan’s capital markets. 

With the BTC-backed yield curve, Metaplanet is looking to create a pricing framework for credit that is collateralized with Bitcoin. This could open the door for institutional investors to utilize BTC while still locking in predictable yields. 

Meanwhile, the company’s “Metaplanet Prefs” program will further weaponize its growing Bitcoin treasury, and will offer instruments that are backed by BTC across multiple credit profiles and maturities. 

With both initiatives, Metaplanet seeks to “digitally transform Japan’s capital markets” while simultaneously preparing for “hyperbitcoinization.”