Japan Moves Closer to Flat 20% Crypto Tax as Lower House Passes FIEA Bill

TL;DR:

• Japan's House of Representatives passed a bill moving crypto oversight to the FIEA, the law governing stocks and bonds

• Crypto gains would be taxed at a flat 20%, replacing the progressive miscellaneous income tax of up to 55%

• One step remains: the Upper House. No vote timeline yet, but ETF trading could start as soon as 2027

On June 11th, the Japanese House of Representatives passed a bill amending the Financial Instruments and Exchange Act, reclassifying cryptocurrencies as financial instruments. While this doesn’t mean it will get written into law, it’s the biggest step forward for the bill since it started making its way through the regulatory system in late 2025. 

After cabinet approval in April this year, the Japanese finance minister, Satsuki Katayama, said:

In response to changes in financial and capital markets, we will expand the supply of growth capital while ensuring market fairness, transparency, and investor protection.

The next step is the Japanese Upper House, which is also the last step. If it passes there, it’ll be written into law. There’s not yet a timeline for the vote in the Upper House but if the bill is enacted as soon as possible it could go into effect early next fiscal year.

This FIEA amendment would move oversight of cryptocurrencies from the Payment Services Act, to the FIEA, the law governing stocks and bonds. This would mean that insider trading in cryptocurrencies in Japan is banned, for the first time. It also means that penalties for transgressions are sharpened, unregistered sellers of cryptocurrencies could face hefty fines and prison.

Under the FIEA, cryptocurrencies would be taxed differently. Rather than a progressive tax, up to 55%, called miscellaneous income, crypto gains would be taxed at a flat 20%. However, because of how the tax system works in Japan, this tax effect could be active as late as 2028.

Oversight by the FIEA could also mean there’s a legitimate way towards crypto ETFs in Japan and representatives of the Tokyo Stock Exchange have indicated that if the bill passes, ETF trading could start as soon as 2027.