Japan is preparing to significantly revamp its approach to taxing digital assets, with the government and ruling coalition backing a plan to implement a flat 20% tax rate on crypto profits. This represents a major shift from the current system, where crypto gains are categorized as ‘miscellaneous income’ and taxed according to a complex structure of income brackets ranging from 5% to 45%, plus an additional 10% inhabitant tax for high earners. The proposed change would align crypto taxation with equities and investment funds, both of which face a consistent 20% rate regardless of earnings. Supporters believe this could encourage broader participation in the domestic cryptocurrency market by removing a significant deterrent for traders and companies. 20% aligns more with traditional investments, creating a more conducive environment for growth.