Japan’s crypto regulations are beginning to take shape as the Asian nation prepares to embrace the sector while ensuring national financial stability. Japan is now mulling a flat 20 percent tax on crypto gains to bring these assets at par with traditional investment options like stocks.
The development was reported by Nikkei on Monday, December 1 citing sources familiar with the matter. The report said out of the 20 percent tax cap on crypto incomes, 15 percent will go to the central government whereas five percent will be wired to local authorities.
By later this year, Japan is likely to finalise its crypto rules. This digital assets tax law will be added to the set of regulations. It will make for a crucial step for Japan in including the crypto sector into the broader tech and investment sector.
According to the Japan Virtual and Crypto Assets Exchange Association (JVCEA), approximately eight million crypto accounts are active in the country. JVCEA’s data also showed that crypto spot trading volume in Japan touched $9.6 billion in September this year.
As per Japanese Finance Minister Katsunobu Kato, the inclusion of crypto assets in the diversified investment portfolios is the need of the hour. In August this year, Kato had said that despite the troublesome volatility of cryptocurrencies, they have shown great potential in terms of serving as trading and investment tools.
Japan’s banking giant SBI has also teamed up with Chainlink, Circle, and Ripple to explore DeFi and crypto services on a large scale.
The Financial Services Authority (FSA) of Japan is expected to announce the national crypto regulations by 2026.