Japan set to cut Bitcoin tax rate to 20% as parliament passes landmark crypto legislation

Japan’s push to integrate cryptocurrencies into mainstream finance advanced on Thursday when the lower house of parliament passed legislation that would regulate digital assets in the same way as stocks, according to Bloomberg.

The bill would designate cryptocurrencies as financial instruments, allowing gains on assets such as Bitcoin and Ether to be taxed at a flat 20% rate instead of the current maximum of 55%, while also creating a pathway for crypto-linked exchange-traded funds.

The measure is expected to move through the upper house and become effective next year, with tax changes slated for 2028.

Supporters say the legislation will provide long-awaited regulatory certainty as interest in digital assets rises among Japanese investors and financial institutions. The reforms also strengthen enforcement through tougher insider trading restrictions and higher penalties for violations, although industry participants warn the increased compliance burden could force smaller exchanges to exit the market.