2024

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Japan’s ruling Liberal Democratic Party (LDP) is advancing a broad regulatory reform on cryptocurrencies to lower the capital gains tax on crypto to 20% and classify digital assets as a distinct asset class. 
LDP lawmaker Akira Shiizaki confirmed that cryptocurrencies will be recognized separately from securities under Japan’s Financial Instruments and Exchange Act. The proposal also seeks to align <a href="https://financefeeds.com/u-s-postpones-crypto-tax-reporting-rules-until-2026/">crypto derivatives taxation</a> with spot investments and delay taxation on crypto-to-crypto swaps, with taxes applied only when crypto is converted into fiat currency. 
These moves reflect a more open stance toward digital assets, as Japan pivots away from heavy investment in U.S. debt securities. The government has historically taken a measured approach to crypto regulation, balancing innovation with investor protection. 
The LDP is accepting input on its <a href="https://financefeeds.com/south-korea-confirms-2025-crypto-tax-rollout-with-35k-exemption/">crypto reforms</a> until March 31, 2025, following commitments made in a 2024 economic stimulus bill. 
Meanwhile, Japanese lawmaker Satoshi Hamada proposed that Japan adopt a strategic Bitcoin reserve, converting part of its foreign currency holdings into BTC to stay competitive with the U.S. However, Prime Minister Shigeru Ishiba pushed back, citing a lack of insight into U.S. Bitcoin policies. 
Regulatory scrutiny remains tight in some areas. In February 2025, Japan’s Financial Services Agency (FSA) asked Google and Apple to block unregistered crypto exchange apps until they comply with local licensing rules. 
The exchanges targeted by the order are Bybit, MEXC Global, LBank Exchange, KuCoin, and Bitget, according to a report by Nikkei. The FSA issued the warning under the Payment Services Act and publicly named the companies for failing to comply with regulatory requirements. 
Apple reportedly removed the apps from its Japanese App Store in response to the request, following repeated warnings from the regulator. Google has yet to take action, according to Nikkei. However, the restriction only applies to future downloads—users who have already installed the apps will still be able to access them. 
<a href="https://financefeeds.com/tradertraitor-hackers-linked-to-308m-theft-from-japanese-exchange-dmm/">Japan</a>&nbsp;issued similar warnings in the past, beginning in 2018, but unregistered exchanges continued to operate within the country, often bypassing regulatory oversight by serving customers across borders. 
Japan applies one of the strictest&nbsp;<a href="https://financefeeds.com/japanese-firm-metaplanet-invests-61m-in-additional-bitcoin/">regulatory frameworks for cryptocurrencies</a>&nbsp;in the Asia-Pacific region. The FSA pushed financial institutions to strengthen monitoring of “unlawful” transfers to crypto exchange providers to ensure compliance with the Payment Services Act. 
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Japan to Cut Crypto Tax to 20 Percent, Pushes Back Bitcoin Reserve

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