Japan Moves to Reclassify Crypto as Financial Products

Japan’s Financial Services Agency (FSA) plans to reclassify over 105 cryptocurrencies, including Bitcoin and Ethereum, under the Financial Instruments and Exchange Act. This change will align their trading profits with traditional financial instruments, subject to a uniform capital gains tax of 20%, as opposed to the current ‘miscellaneous income’ classification and a maximum tax rate of 55%. The proposal is expected to be included in Japan’s early 2026 budget plan.