Japan Cuts Crypto Tax to 20%, But Only for Certain Assets
Japan is moving forward with a major tax reform for cryptocurrencies in 2026, slashing the tax on crypto gains from as high as 55% down to a flat 20%. The change is aimed at encouraging domestic trading and bringing crypto taxation more in line with equities and investment trusts.
A Move to Attract More Investors
The new tax structure will treat certain cryptocurrencies under a separate framework, making it easier for investors to participate while ensuring regulatory safeguards. Kimihiro Mine, CEO of finoject, said, “With cryptocurrencies now under the revised Financial Instruments and Exchange Act, measures to protect investors are being put in place, making it easier for many people to accept cryptocurrencies.”
Not All Cryptos Qualify
It’s important to note that the tax cut only applies to “specified crypto assets”—those handled by businesses registered in the Financial Instruments Business Operator Registry. While major coins like Bitcoin and Ethereum are expected to qualify, exact eligibility criteria for businesses are still being clarified.
Losses and Carryover Benefits
Investors can also benefit from a three-year carryover deduction system, allowing losses from crypto trades to be offset against profits for the next three years starting in 2026.
Crypto ETFs on the Horizon
The law revision also opens the door for investment trusts that include crypto, and Japan recently launched its first XRP exchange-traded fund (ETF). Plans are in motion to roll out two more ETFs providing exposure to specific crypto assets, further expanding investment options for Japanese traders.
