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Japan is preparing a major crypto tax change in 2026, but only certain digital assets will qualify for the lower rate.
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The reform brings crypto closer to stocks and ETFs, signaling a shift toward tighter regulation and institutional access.
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Bitcoin and Ethereum are likely in focus as Japan reshapes how crypto fits into its financial system.
Japan is moving closer to fixing one of crypto’s biggest pain points in the country – taxes. But the details show the change won’t apply to everyone.
Under its 2026 tax reform blueprint, Japan plans to cut crypto capital gains tax from as high as 55% to a flat 20%. The move would put certain digital assets on the same footing as stocks and investment trusts, a long-standing demand from investors and industry groups.
The reform isn’t new but what’s clearer now is how limited its scope will be.
Only ‘Specified’ Crypto Assets Will Qualify
The lower tax rate will apply only to “specified crypto assets” handled by businesses registered under Japan’s Financial Instruments and Exchange Act (FIEA).
Around 105 cryptocurrencies currently listed on registered exchanges are expected to fall under this category, with major assets like Bitcoin and Ethereum likely included.
Assets outside this framework will not benefit. The blueprint does not clearly include NFTs, and income from staking or lending remains a grey area under the current proposal.
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Bringing Crypto Closer to Stocks
Another notable change is the introduction of a three-year loss carryforward for qualifying crypto trades. This allows investors to offset future gains with past losses, a rule already standard for stocks and FX trading in Japan.
However, losses from crypto trades will remain ring-fenced and cannot be used to offset gains from other asset classes.
ETFs and Institutional Access in Focus
The tax reform also supports Japan’s broader push to integrate crypto into traditional finance. Investment trusts holding crypto would be allowed, and the country has already launched its first XRP exchange-traded fund.
Final rules will depend on legislation passed by the Diet ahead of fiscal year 2026. For now, Japan’s direction is clear: crypto is being welcomed but only within a tightly regulated framework.
