Japan Signals Bitcoin May Fit Diversified Portfolios as Officials Consider Trading Rules and Tax Reform

• Japan signals regulatory acceptance of crypto assets

• FSA proposes reclassification and a flat tax of ~20.315% versus current 15–56% brackets

• Major Japanese firms (SBI Group, Metaplanet) and stablecoin planning signal market integration

Japan crypto policy shifts to acceptance; Finance Minister backs crypto in portfolios—learn tax changes, regulatory moves, and investor implications. Read more.

Japan’s Finance Minister Katsunobu Kato said crypto deserves a spot in portfolios, while pledging to build a sound trading environment for the sector.

Japan’s Finance Minister Katsunobu Kato recognized that cryptocurrencies deserve a place in diversified investment portfolios.

According to a Monday Bloomberg Japan report, Kato acknowledged the role of cryptocurrencies in a diversified investment portfolio during a speech. He was addressing the public from the stage during his keynote at Web3 Conference WebX 2025 in Tokyo.

“While crypto assets carry the risk of high volatility, by establishing a proper investment environment, they can become an option for diversified investment,” Kato said.

Japan’s minister of finance added that, considering the growing user base, he intends to focus on creating a sound trading environment for cryptocurrencies.

Related: Bitcoin treasury firm Metaplanet graduates to FTSE Japan and All-World indexes

What is Japan’s stance on cryptocurrencies?

Japan crypto policy is increasingly supportive: the Finance Minister and regulators are moving to recognize crypto as a legitimate investment class while tightening market safeguards. Officials emphasize investor protection and sound trading infrastructure alongside steps to simplify taxation for retail and institutional holders.

How will proposed tax changes affect investors?

Japan’s Financial Services Agency (FSA) has asked the government to reclassify crypto gains from “miscellaneous income” to a separate category taxed similarly to stocks. Under the proposal, gains would face a flat rate of about 20.315%, replacing the current progressive range of 15%–56% depending on individual brackets. This change aims to reduce tax volatility and make after-tax returns for crypto more predictable for investors.

Why is this regulatory shift important now?

Regulatory clarity can expand institutional participation. Recent corporate moves — Metaplanet’s index upgrade and SBI Group’s blockchain partnerships — show Japanese financial institutions are integrating crypto infrastructure. The FSA’s push to approve yen-denominated stablecoins would further embed crypto into payment and settlement systems, increasing market utility.

Frequently Asked Questions

How would a flat crypto tax change reporting for retail investors?

Switching to a flat tax of ~20.315% would simplify reporting by removing variable progressive rates, likely reducing tax surprises for individual investors and aligning crypto treatment more closely with stock taxation.

What protections are regulators proposing for crypto trading?

Regulators emphasize robust trading rules, stronger custody safeguards, clearer licensing for exchanges, and oversight to reduce fraud and market abuse while enabling wider participation.

Key Takeaways

• Policy shift: Japan’s officials are moving from cautious oversight to structured acceptance of crypto.
• Tax reform: The FSA proposes a flat crypto tax (~20.315%) to replace current 15–56% miscellaneous income treatment.
• Market impact: Corporate adoption and stablecoin plans increase the likelihood of broader market integration; investors should reassess tax and custody choices.

Conclusion

Japan crypto policy is evolving: policymakers and regulators are balancing investor protection with market integration by proposing tax reform and stronger trading rules. COINOTAG will monitor developments as the FSA advances proposals and market participants adapt. Investors should review tax planning and custody options in light of these changes.