Japan’s House of Representatives passed a bill on June 11, 2026 that moves cryptocurrency regulation out of the Payment Services Act and under the Financial Instruments and Exchange Act, the same law that governs stocks and bonds. The change reclassifies crypto as a financial product, opens a path to crypto exchange-traded funds, and replaces Japan’s punishing crypto tax with a flat 20% rate. Japan’s Financial Services Agency tied the move to the country’s 14 million-plus open crypto accounts, noting that people earning under 7 million yen ($43,600) a year hold roughly 70% of them. For business readers watching how major economies treat digital assets, this is one of the clearest signals yet that Japan wants crypto inside its mainstream capital markets.
The Financial Instruments and Exchange Act, or FIEA, is Japan’s core securities law governing how stocks, bonds, and other regulated investment products are issued, disclosed, and traded.
- Japan’s lower house passed a bill on June 11, 2026 reclassifying crypto as a financial instrument under the FIEA, sending it to the upper house for expected final approval.
- Crypto capital gains would be taxed at a flat 20%, down from a maximum of 55%, with the new rate slated to begin in 2028 and the broader rules taking effect in 2027.
- The bill adds a stock-style insider trading ban, mandatory disclosure rules, and a 2 million yen investment cap on unaudited token offerings.
- Maximum prison time for running an unregistered crypto business jumps from three years to 10, with fines up to 10 million yen ($62,800).
Published: June 11, 2026, 16:30 UTC
What the bill actually changes
Until now, Japanese law treated cryptocurrency mainly as a payment method under the Payment Services Act. The new bill reframes it as an investment asset and pulls it under the FIEA, which carries stricter trading, disclosure, and enforcement standards. The FSA said in its announcement of the bill’s passage that the framework is meant to improve user protection while still encouraging innovation, “given that crypto assets are increasingly positioned as investment targets for both domestic and foreign investors.”
The reclassification matters because it sets the legal foundation for products Japanese investors cannot easily access today. The ruling Liberal Democratic Party has already signaled support for crypto ETF trading, arguing that ETFs “would provide investors with easy-to-understand ways of investment.” Once crypto sits inside the securities framework, a regulated spot crypto ETF in Japan becomes a realistic near-term prospect rather than a regulatory impossibility.
The tax change traders will notice first
The headline number for individual investors is the tax cut. Japan currently taxes crypto gains as miscellaneous income, which can reach a combined rate of about 55% for high earners. The bill moves crypto to a flat 20% rate, matching the treatment of stocks and bonds. The timing is staggered: the regulatory rules are expected to take effect in 2027, while the 20% tax rate is slated to begin in 2028, according to reporting from crypto.news.
For a market where most account holders are everyday retail investors, cutting the top rate by more than half removes a long-standing reason to hold crypto offshore or simply avoid realizing gains. It also brings Japan closer to jurisdictions that already tax digital assets like conventional investments.
Stricter rules come with the lower taxes
The bill is not a giveaway. Moving crypto under the FIEA imports the enforcement tools that apply to listed securities. The FSA said it is introducing an insider trading ban that works like the stock market’s: company insiders and exchange employees cannot trade tokens while holding unpublished material information, such as an exchange planning to list or delist a coin.
New disclosure rules require token projects to publish clear details on how their technology works, their token supply, and their finances. If a company raises money through a token but skips an independent audit, retail investors face a strict 2 million yen investment cap on that offering. Enforcement penalties rise sharply. The maximum sentence for operating an unregistered crypto business climbs from three years to 10, fines can reach 10 million yen, and Japan’s securities watchdog gains explicit power to run criminal investigations and ask courts to freeze funds.
What comes next
The bill now moves to the upper house, the House of Councillors, where it is widely expected to pass. If it clears that stage, the new framework would take effect in 2027, with the tax change following in 2028. The practical next milestone to watch is whether the FSA opens the door to a domestic spot crypto ETF once the reclassification is law, and how Japanese exchanges adapt their disclosure and compliance systems to securities-grade standards.
Frequently asked questions
Is crypto now taxed at 20% in Japan?
Not yet. The bill sets a flat 20% rate to replace the current maximum of around 55%, but that rate is slated to begin in 2028. The broader regulatory rules are expected to take effect in 2027, after the upper house gives final approval.
Does this mean Japan will get a crypto ETF?
It makes one far more likely. By reclassifying crypto as a financial instrument under the FIEA, the bill creates the legal basis for regulated crypto ETFs. The ruling party has voiced support, but a specific product and approval timeline have not been confirmed.
Has the bill become law?
No. Japan’s lower house passed it on June 11, 2026. It still needs approval from the upper house, which is widely expected to follow, before it takes effect.
