Japan Aims for Crypto Reclassification by 2026, Potentially Boosting Market Stability

Japan’s Financial Services Agency (FSA) is proposing to reclassify cryptocurrencies as financial products by 2026. This would align digital assets with traditional financial instruments like stocks and bonds under the Financial Instruments and Exchange Act. The proposed changes include a flat 20% capital gains tax, replacing the existing progressive system up to 55%. This shift is expected to attract institutional investors and make it easier for crypto exchange-traded funds (ETFs) to launch in Japan. By aligning with traditional financial products, the move aims to enhance market stability and boost confidence.