2026

Spot

Reserve

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<ul>
 <li>Japan shifts crypto oversight from payment law to investment rules under the Financial Instruments Act.</li>
 <li>Exchanges face stricter registration, disclosure, governance, security, and customer-protection duties.</li>
 <li>The bill creates direct insider-trading restrictions and penalties for unlawful crypto market activity.</li>
 <li>Spot ETFs still need separate approvals, while the 20% crypto tax rate is expected from January 2028.</li>
</ul>
Japan’s parliament has <a href="https://coinpost.jp/?p=725027" rel="noopener noreferrer nofollow">approved</a> a digital-asset overhaul that brings cryptocurrency trading closer to the rules governing investments. The Upper House passed the <a href="https://blockonomi.com/senate-democrats-threaten-to-block-crypto-bill-over-trumps-1-4b-conflict/" rel="noopener noreferrer nofollow">Crypto Bill</a> on July 15, completing a process that began with Cabinet approval in April.
<div class="embed-x">
 <blockquote class="twitter-tweet">
 BREAKING: <img src="https://s.w.org/images/core/emoji/17.0.2/72x72/1f1ef-1f1f5.png" alt="🇯🇵"> Japan has officially passed a bill to legalize Bitcoin and crypto ETFs, and now on a path to reduce crypto taxes from 55% to 20%.
 World’s 4th-largest economy is betting big on crypto. <a href="https://t.co/OzwjNRZjZ4" rel="noopener noreferrer nofollow">pic.twitter.com/OzwjNRZjZ4</a>
 — Ash Crypto (@AshCrypto) <a href="https://x.com/AshCrypto/status/2077316005206847666?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">July 15, 2026</a>
 </blockquote>
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The measure cleared the House of Representatives in June, followed by committee approval in the House of Councillors on July 14. The new framework should take effect within one year, placing implementation in 2027.
<h2 id="b-investment-rules-replace-payment-based-crypto-oversight-b">Investment Rules Replace Payment-Based Crypto Oversight</h2>
The amendment shifts oversight from the Payment Services Act to the Financial Instruments and Exchange Act. That change reflects the use of <a href="https://blockonomi.com/middle-east-tensions-drive-oil-surge-while-equities-and-digital-assets-retreat/" rel="noopener noreferrer nofollow">digital assets</a> as investment products rather than payment tools.
However, the law does not classify covered assets as securities. Instead, it creates a separate category while applying requirements similar to those governing Type I financial instrument businesses.
Under the new framework, crypto trading operators will face stricter registration, governance, customer-protection, and asset-security standards. Exchanges must also disclose key information about listed tokens, including their functions, supply structures, and underlying technology.
In addition, issuer-linked tokens, including assets distributed through initial exchange offerings, will be subject to reporting requirements. These disclosures must cover the issuer’s operations, financial condition, and major developments that could affect market participants.
The <a href="https://moneycheck.com/japans-financial-services-agency-supports-stablecoin-pilot-by-major-banks/" rel="noopener noreferrer nofollow">Financial Services Agency</a> also plans to introduce additional standards covering liquidity, regulatory compliance, and transfer-record management. Furthermore, operators may be required to maintain compensation reserves for losses caused by unauthorized asset outflows.
Reserve requirements would depend on each platform’s digital-asset balances and security arrangements. Therefore, the framework is designed to strengthen customer protection following thefts, cybersecurity breaches, or other operational failures.
Alongside these safeguards, the Crypto Bill establishes a direct insider-trading regime for the cryptocurrency market. The rules will cover issuers, exchange employees, major traders, and individuals who receive confidential information.
Restricted information may include planned listings, delistings, issuer developments, and large transactions. As a result, covered parties will be prohibited from trading affected assets before such information becomes public.
To reinforce these restrictions, insider-trading violations may carry prison terms of up to five years or fines reaching ¥5 million. Meanwhile, unregistered operators could face imprisonment of up to 10 years.
<h2 id="b-spot-etf-and-tax-reforms-depend-on-further-approval-b">Spot ETF and Tax Reforms Depend on Further Approval</h2>
However, the legislation does not immediately authorize spot <a href="https://coincentral.com/bitcoin-and-ether-etfs-bleed-over-9-billion-in-four-months-as-crypto-prices-fall/" rel="noopener noreferrer nofollow">Bitcoin or Ether ETFs</a> in Japan. Instead, it creates the financial-product framework regulators need before considering approval of those investment vehicles.
As a result, authorities must still revise relevant rules under the Investment Trusts Act. Regulators would then need to review individual products and approve their listing on a domestic exchange.
Tax reform also remains tied to the law’s implementation. Eligible cryptocurrency gains could shift from progressive miscellaneous-income taxation, which can reach 55%, to a separate rate of about 20%.
That rate would include a 15% national tax and a 5% local tax before the reconstruction surtax. However, the reduced treatment would apply only to specified assets handled through registered businesses.
Under the proposed system, operators would report qualifying customer transactions to <a href="https://parameter.io/trumps-100-tariff-warning-targets-europe-over-digital-tax-on-tech-giants/" rel="noopener noreferrer nofollow">tax authorities</a>. Eligible losses could also be carried forward for three years, while covered derivatives and ETFs would receive similar tax treatment.
Nevertheless, activities conducted outside the regulated framework may not qualify for the lower rate. Since the amended law is expected to take effect in 2027, the tax changes are currently anticipated from January 2028.
Parliamentary approval therefore represents a decisive step, although it does not complete the process. Detailed ordinances, implementation rules, and Financial Services Agency approvals remain necessary before ETFs can launch and lower tax rates can apply.
The post <a href="https://blockonomi.com/japans-upper-house-backs-crypto-bill-targeting-etfs-and-lower-taxes/" rel="noopener noreferrer nofollow">Japan’s Upper House Backs Crypto Bill Targeting ETFs and Lower Taxes</a> appeared first on <a href="https://blockonomi.com" rel="noopener noreferrer nofollow">Blockonomi</a>.

Japan’s Upper House Backs Crypto Bill Targeting ETFs and Lower Taxes

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