Cyprus vs Japan
Crypto regulation comparison
Cyprus
Japan
Cyprus regulates crypto under the EU MiCA framework (fully applicable since December 2024). CySEC authorizes crypto-asset service providers (CASPs) while the Central Bank of Cyprus oversees e-money tokens and asset-referenced tokens. Crypto gains from occasional transactions are currently not taxed; active trading is taxed as income at 0-35%. A proposed 8% flat tax on crypto gains is pending parliamentary approval for 2026.
Japan is one of the world's most comprehensively regulated crypto markets. The Payment Services Act and Financial Instruments and Exchange Act govern crypto exchanges and tokens. Japan classifies crypto as "crypto-assets" and taxes gains as miscellaneous income at rates up to 55%, though reforms to lower this rate are under active discussion.
Key Points
- CySEC authorizes and supervises crypto-asset service providers under MiCA
- No capital gains tax on crypto for occasional transactions; active trading taxed as income
- EU MiCA regulation applies as an EU member state
- AML/CFT requirements enforced for all crypto businesses
- Proposed 8% flat tax on crypto gains pending parliamentary approval for 2026
Key Points
- Crypto exchanges must register with the FSA under the Payment Services Act
- Crypto gains taxed as miscellaneous income at up to 55% (national + local tax)
- Japan's self-regulatory body JVCEA sets industry standards for exchanges
- 2022 stablecoin legislation (revised Payment Services Act) regulates stablecoin issuance
- Government considering tax reform to apply a flat 20% separate taxation on crypto gains
Sources
- NTA - Crypto Assets Tax Pamphlet
- FSA - Registered Crypto-Asset Exchanges
- FSA - Regulating Crypto Assets in Japan
- NTA - Tax Answer No. 1524 (暗号資産)
- NTA - Income Tax Guide 2025 (English PDF)
- Japanese Law Translation - Payment Services Act
- FSA - Discussion Paper on Cryptoasset Regulatory Systems
- FSA - Registered Electronic Payment Instrument Exchanges