Japan to Recognize Cryptocurrencies as Financial Products... Tax Rate to Be Lowered to Stock Level

The Japanese government plans to recognize 105 types of cryptocurrencies, including Bitcoin and Ethereum, as financial products under the Financial Instruments and Exchange Act.

On November 16, the Asahi Shimbun reported that the Financial Services Agency of Japan intends to mandate public disclosure of information related to cryptocurrencies. In exchange, the tax rate imposed on profits from cryptocurrency transactions will be lowered to the same level as stocks.

The information that exchanges will be required to disclose includes characteristics such as whether there is an issuer, the underlying technologies used in the cryptocurrency such as blockchain, and the risks of price volatility.

Additionally, regulations on insider trading will be strengthened to prevent cryptocurrency issuers and exchanges from trading based on undisclosed information.

The Japanese government will maintain the current registration system for cryptocurrency exchanges. However, it plans to newly introduce a notification system for operators that provide important management systems.

However, banks and insurance companies will be prohibited from selling cryptocurrencies to customers.

The tax rate on profits from cryptocurrency transactions is currently as high as 55 percent, but if recognized as financial products, it will be reduced to 20 percent, the same as stocks.

The Japanese government plans to submit the relevant legal amendments to the regular session of the National Diet as early as next year.

This content was produced with the assistance of AI translation services.