Japan is poised to unlock greater crypto adoption, particularly among institutional investors. A significant tax reform proposal from the Financial Services Agency (FSA) aims to alleviate the punitive nature of current cryptocurrency taxation laws and pave the way for the emergence of exchange-traded funds (ETFs). 20% flat rate on crypto profits, compared to 55% progressive rates currently in place, is proposed as part of a broader plan to transform Japan into a hub for asset management. This move aims to attract investors and corporations, particularly those interested in crypto assets. 12 million active accounts in the country represent over five trillion yen (about $34 billion) worth of cryptocurrency assets, highlighting the potential of this market. The FSA’s proposed reforms would align cryptocurrencies with financial products, allowing for stricter regulations on insider trading and investor protection. This shift towards a more favorable regulatory environment could potentially lead to the launch of spot Bitcoin ETFs in the country, further bolstering the growth of crypto markets within Japan.