Japan Advances Crypto Bill, Opening Path for ETFs and Tax Reform: Report

Japan’s Lower House has reportedly approved legislation that would classify cryptocurrencies within the country’s financial instruments regulatory framework, a move that could pave the way for crypto exchange-traded funds and more favorable tax treatment.

Japan’s Lower House has reportedly approved a measure that would place crypto assets within the nation’s financial instruments regulatory structure, potentially creating a route for cryptocurrency ETFs and more favorable tax policies for digital asset investors.

According to a Bloomberg report published on Thursday, the proposal would align crypto assets more closely with the regulatory standards applied to stocks and bonds by introducing tougher trading oversight. The measure is expected to be implemented next year after it completes review and approval in the Upper House.

The proposed reforms could reduce the capital gains tax applied to crypto assets such as Bitcoin (BTC) and Ether (ETH), lowering the current maximum rate of 55% to a flat 20%, matching the treatment given to stocks and bonds. The revised tax framework is expected to be introduced in 2028.

Official documents indicated that the legislation had already passed the Committee on Financial Affairs on June 10. However, at the time of writing, the plenary vote section on the bill-tracking website remained unupdated and had not yet reflected the latest development.

Japan Moves Crypto Into Formal Financial Market Framework#

The recent progress in parliament comes after months of indications that Japan was moving toward treating crypto as part of a broader financial-market structure rather than maintaining its earlier payment-centered regulatory approach.

In November 2025, the Asahi Shimbun reported that Japan’s Financial Services Agency (FSA) had chosen to place cryptocurrencies under the Financial Instruments and Exchange Act, covering Bitcoin (BTC), Ether (ETH), and other digital assets traded on domestic crypto exchanges.

Documents released by the FSA in April 2026 indicated that the proposed reforms would shift the regulation of crypto-asset transactions from the Payment Services Act to the Financial Instruments and Exchange Act.

The FSA stated that the legislation would classify crypto assets as financial instruments distinct from securities, while adding disclosure requirements, stricter supervision of exchanges, insider trading controls, and tougher sanctions against operators that fail to register.

Under the proposed framework, crypto-asset service providers would be required to disclose details about the digital assets they support, while issuers of certain tokens would need to meet reporting obligations when carrying out offerings or secondary market distributions.

According to Bloomberg, the regulatory shift could pave the way for cryptocurrency-linked ETFs in Japan, offering domestic investors a regulated means of gaining exposure to digital assets beyond traditional crypto exchanges and publicly traded firms that hold tokens on their balance sheets.