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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