Japan Finance Minister Announces Plan to Legalize Crypto ETFs
Japan's Finance Minister Satsuki Katayama announced a plan to legalize cryptocurrency ETFs, reclassifying digital assets as "financial products" under the same laws as stocks. The move, which follows a bill that has already passed the House of Representatives, would also slash the tax on crypto gains from as high as 55% to a flat 20%. Financial firms like SBI Holdings are preparing to launch products in anticipation of the new framework.
Crypto ETF legalization plan
▪The plan is a response to the success of crypto ETF products in overseas markets.
▪The announcement was made at the "Open QUICK 2026" seminar in Tokyo on July 10, 2026.
▪On June 1, 2026, the ruling Liberal Democratic Party submitted a proposal urging a legal framework for crypto ETF trading.
▪Japan's Finance Minister Satsuki Katayama announced a plan to legalize cryptocurrency exchange-traded funds (ETFs).
Regulatory reclassification framework
▪Japan's Financial Services Agency plans to create a new unit focused on crypto assets and stablecoins in July 2026.
▪This reclassification will place crypto under the Financial Instruments and Exchange Act (FIEA), the same law governing stocks and bonds.
▪The plan involves reclassifying cryptocurrencies from a "means of payment" under the Payment Services Act to "financial products."
Financial firms preparation
▪SBI Holdings aims to secure approximately ¥5 trillion (about $32 billion) in assets under management within three years of launching its crypto products.
▪Firms like Nomura, SBI, Daiwa, and Mitsubishi UFJ were already studying or designing crypto ETF products ahead of approval.
▪In May 2026, SBI Holdings proposed a dual-asset ETF providing exposure to both Bitcoin and XRP.
▪SBI Holdings also proposed a hybrid investment trust combining 51% gold-based ETFs and 49% crypto-asset ETFs.
▪Brokerage firms including BI Securities and Rakuten Securities are prepared to offer crypto ETFs once the legal framework is in place.
Tax reform provisions
▪The new 20% tax rate, which matches the one for stocks and investment trusts, is expected to apply from January 1, 2028.
▪The legislative revision would change the tax on crypto profits from a progressive rate of up to 55% to a flat 20% separate rate.
Legislative status
▪An amendment to the FIEA has passed the House of Representatives and is now in the House of Councilors.
▪The broader legal framework for crypto ETFs is expected to take effect in 2027.
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