Japan’s ruling Liberal Democratic Party (LDP) is advancing a proposal to reduce capital gains taxes on cryptocurrencies to 20%. This reform aims to classify digital assets separately from traditional securities, aligning Japan’s approach with global trends. The move is part of a broader effort to make Japan a more competitive hub for crypto investments.
The proposal includes changes to the taxation of crypto derivatives and the deferral of taxes on crypto-to-crypto swaps until converted into fiat currency. Lawmakers believe these changes will encourage growth in the sector while maintaining regulatory oversight.
Japan has historically taken a cautious approach to crypto regulations, balancing innovation with consumer protection. This proposal follows ongoing crypto tax reforms and the government’s broader economic stimulus initiatives. Lawmakers have also considered the potential adoption of Bitcoin reserves to diversify national assets.
While some officials support Japan’s increasing engagement with crypto, concerns remain about oversight and market stability. The proposal is currently open for public feedback, with final decisions expected in the coming months.
