Japan's Diet Gives Crypto the Suit-and-Tie Treatment 👔

Japan's House of Representatives approved amendments to the Financial Instruments and Exchange Act on Thursday, June 11, advancing a bill that would classify cryptocurrencies including $BTC, $ETH, and $XRP as financial products on par with stocks and bonds. The legislation now heads to the House of Councillors for final passage.

If enacted, the framework would treat digital assets as securities rather than miscellaneous property, opening the door for regulated crypto investment products in Japan. The Japan Exchange Group has previously indicated plans to bring spot Bitcoin and crypto ETFs to market by 2027, and the reclassification is expected to support the launch of such offerings. XRP is currently categorized as a financial asset under Japanese rules; the amendment would extend equivalent status to $BTC, $ETH and other major tokens.

The bill also addresses the country's tax treatment of crypto gains. Profits on digital assets are currently subject to a progressive income tax of up to 55%. Under the proposed framework, the rate applied to qualifying crypto income would be reduced to a flat 20%, aligning it closer to the rate applied to traditional securities.

Lawmakers framed the changes as part of a broader effort to modernize Japan's financial market infrastructure and clarify oversight responsibilities between the Financial Services Agency and the country's self-regulatory organizations. Industry participants have said the reforms could encourage greater institutional participation by providing a familiar regulatory wrapper around digital assets.

The House of Councillors is expected to take up the bill in the coming weeks. If approved, Japan would become one of the first major economies to formally fold major cryptocurrencies into its securities law, alongside ongoing parallel work on stablecoin and tokenization rules.