Japan Declares Crypto an Official Asset: 20% Tax on 105 Tokens & Insider Trading Ban

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Japan Approves Landmark Bill: Cryptocurrency Is Now an Official Financial Asset

Key Takeaways

  • Crypto reclassified from “means of settlement” to financial product under Japan’s FIEA.
  • Tax rate on 105 approved tokens drops from up to 55% to flat 20%.
  • Insider trading on crypto now prohibited – fines up to ¥10M, prison up to 10 years.
  • Nomura and SBI already preparing domestic crypto ETF products.
  • Banks and insurance companies may now hold crypto and register as licensed exchanges.

What Changed and Why It Matters

A new bill approved by the Japanese government will legally redefine cryptocurrency. Previously considered a payment method, it will now be classified as a standard financial asset, similar to stocks and bonds. This change, reported by Nikkei, lays the groundwork for future developments in the country’s cryptocurrency market, which already has 7.3 million active users.

Previously, profits from cryptocurrency were taxed at varying rates, potentially reaching 55% for those with higher incomes. Now, Japan has introduced a flat tax rate of 20% on profits earned from 105 approved cryptocurrencies listed on Japanese exchanges. This change could mean a significant increase in take-home pay – for example, someone with ¥10 million in gains would save ¥3.5 million in taxes. This reform is part of Japan’s broader effort to modernize its digital policies and align with European regulations, which is intended to attract international investment and increase confidence in cryptocurrencies listed in Japan.

As a researcher tracking these developments, I’m seeing that the complete rollout of some newer tax rules and the listing of certain Exchange Traded Funds is now expected to continue into early 2027.

The 105 Tokens and the Two-Tier Reality

The 20% tax rate isn’t applied to all cryptocurrencies. It only applies to 105 specific tokens that meet standards set by Japan’s Financial Services Agency (FSA) for things like clear information, security, fair trading, and required reporting. These tokens must also be listed on at least three of Japan’s authorized crypto exchanges, or have been listed on at least one exchange for six months and approved by an industry association.

The main digital assets benefiting from this are Bitcoin, Ethereum, XRP, and Solana, along with widely traded stablecoins like USDC, USDT, and the new JPYC. Other assets already approved for institutional investors, as listed by the JVCEA’s ‘Green List’ – including Avalanche, Polygon, Cosmos, and Aave – also qualify. This focus on the Green List highlights that Japanese institutions prioritize well-established infrastructure and DeFi platforms with strong trading volume, rather than riskier, newer cryptocurrencies.

Income from sources not specifically listed is taxed as miscellaneous income, at rates up to 55%. This includes things like staking rewards, lending income, and profits from NFTs, no matter the cryptocurrency involved. Profits from unlisted altcoins and trading on unregulated platforms like Bitget and certain Bybit setups also fall into this higher tax bracket. For example, a Japanese investor could pay significantly more in taxes – up to 55% – on profits from an unlisted token traded offshore than the 20% rate for an approved token on a regulated exchange, potentially wiping out any gains they might make.

In my research, I’ve observed that this two-tiered system essentially creates a strong incentive for everyone to gravitate towards the approved list of tokens. It becomes the obvious choice for most traders. What’s more, because trading these approved tokens avoids legal issues around insider trading, it attracts larger institutional investors who need to operate within regulated spaces, making those tokens more stable and secure.

The Insider Trading Prohibition

Until now, Japan lacked laws to prevent insider trading of cryptocurrencies. Previously, anyone with advance knowledge of things like new exchange listings, security issues, or upcoming partnerships could legally trade on that information. This new bill changes that.

It is now illegal to trade using confidential information. Those who do so could face penalties of up to ¥10 million and up to 10 years in prison – the same punishment as insider trading in regular financial markets. This new rule will change how people in Japan with early access to information – such as those at exchanges, development companies, or regulators – behave. For the first time, there’s a legal limit to the information advantage some people had in the Japanese crypto market, which has historically been a common practice.

The current regulations are what allow large investors to confidently participate in the market. Nomura and SBI aren’t developing ETF products for a market where traders can profit from advance knowledge of listings; they’re building them for the market this legislation will establish.

The Institutional Pathway

Reports suggested that SBI was developing crypto ETFs for the local market, which would have been a significant move. However, the company has denied these claims.

As I’ve been researching the crypto landscape in Japan, it’s becoming clear that traditional financial institutions like banks and insurance companies are starting to hold crypto assets as investments. Some are even applying to become licensed exchanges. This is really interesting because models like SBI VC Trade – which offers free yen transactions and even *pays* users to make trades – now seem like a glimpse into how crypto and mainstream banking could eventually integrate. GMO Coin, backed by the larger GMO Group and already well-connected to traditional finance, appears to be following a similar path.

What Licensed Exchanges Look Like Now

Only Japan’s 30 officially approved cryptocurrency exchanges are subject to the 20% tax rate. These exchanges all have different fee systems, and with taxes now a major factor, choosing an approved platform is the most financially sensible option.

Bitbank, GMO Coin, and SBI VC Trade all offer very competitive trading fees, making them good choices for frequent traders. Bitbank has negative maker fees (-0.02%), meaning you can *earn* money when providing liquidity, and taker fees of 0.12%. GMO Coin’s fees range from -0.01% to -0.03% for makers and 0.05% to 0.09% for takers, and they offer free crypto deposits and withdrawals. SBI VC Trade matches this with -0.01% maker fees, 0.05% taker fees, and free yen deposits and withdrawals. These three exchanges minimize costs, which is especially helpful given the 20% tax on trading profits.

Godex reports that Binance Japan charges 0.1% for both buy and sell orders, which can be lowered to 0.075% if you pay with BNB. This applies under their Japanese license, obtained after acquiring Sakura Exchange BitCoin. Coincheck is appealing to those who use limit orders, offering no fees for makers and only 0.10% for takers. bitFlyer’s Lightning platform has fees around 0.10% to 0.15% for smaller trades. While their Marketplace claims zero fees, it actually adds a 2% to 10% markup, making it costly. Kraken Japan is the most expensive option for typical users, with fees up to 1% plus a spread on instant buys. However, their Pro platform offers lower fees starting at 0.25% for makers and 0.40% for takers, but requires higher trading volumes.

Here’s what this means for traders: Using quick-buy features often results in paying fees that are higher than the tax savings on smaller trades. The full financial benefits of this change are only seen when using limit orders on standard trading platforms. Specifically, exchanges like bitbank, GMO Coin, and SBI VC Trade actually *pay* traders to help provide liquidity through negative maker fees.

This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. It’s essential to do your own research and speak with a qualified financial advisor before making any investment choices.

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2026-04-10 10:29