Crypto News: Japan Advances Crypto Reform Bill Covering Bitcoin, Ethereum and XRP

Key Insights:

• Japan’s lower house approved a bill to classify crypto as a financial product similar to stocks.
• The bill would cut Japan’s crypto tax rate from as high as 55% to a flat 20% from 2028.
• The crypto news would add insider trading rules and tougher penalties for unregistered crypto sales.

Japan has moved a major crypto reform bill through its House of Representatives. The bill seeks to place Bitcoin, Ethereum, XRP, and other digital assets under rules closer to those used for stocks and bonds. Lawmakers will now send the amendment to the House of Councilors for review. If it clears the next stage, Japan will prepare a new framework for crypto trading, taxation, disclosures, and market conduct.

Crypto News: Japan Moves Crypto Assets Into Securities-Style Rules

Japan’s lower house approved changes to the Financial Instruments and Exchange Act on June 11. The amendment would classify crypto assets as financial products, rather than treating them mainly as payment-related assets. The change would bring Bitcoin, Ethereum, XRP, and other traded tokens closer to Japan’s investment product rules.

The bill still needs approval from the House of Councilors before it becomes law. Officials expect the framework to begin next year if lawmakers complete the process. Crypto news would give regulators in Japan more direct authority over markets and firms that serve investors.

The Financial Services Agency has pushed the reform to build clearer rules for digital assets. The agency wants crypto trading to operate under a defined market structure. That structure would cover exchanges, issuers, traders, and investment products.

Bitcoin, Ethereum and XRP Face New Tax Treatment

The reform would also change how Japan taxes crypto gains. At present, crypto profits can fall under a progressive tax system that reaches as high as 55%. The new approach would place gains from Bitcoin, Ethereum, XRP, and other tokens under a flat 20% tax rate.

The tax change would align crypto gains more closely with stocks and bonds. Reports state that the lower rate would take effect from 2028. Until then, investors would continue under the current system unless separate tax rules change earlier.

The tax shift forms part of Japan’s attempt to bring crypto into the same investment category as other financial products. A fixed rate would give investors a clearer view of their tax duties.

Bill Opens Path for Crypto ETFs in Japan

The reform could also allow Japan to move toward spot crypto exchange-traded funds. By classifying digital assets as financial products, regulators would have a clearer legal basis to review ETFs tied to Bitcoin and other major tokens.

Japan Exchange Group has also been linked to plans for crypto ETF products by 2027. The bill does not launch those products by itself. However, it creates a legal path for regulators and exchanges to assess them under investment product rules.

Institutional firms would gain a clearer framework for custody, trading, and product design. Companies already operating in Japan’s crypto sector could adjust their services to comply with the new rules. SBI Holdings, through SBI VC Trade, has expanded its digital asset services.

Japan Adds Insider Trading Rules and Stronger Penalties

The bill would bring stricter conduct rules to the crypto market. The crypto news would ban insider trading in digital assets in a manner closer to listed equity rules. Traders and market participants would face limits on using non-public information for crypto transactions.

The amendment would also raise penalties for selling unregistered digital assets. The maximum prison sentence would rise from three years to 10 years. Regulators would use those penalties to address unlawful offerings and protect investors from products that bypass registration rules.

Japan’s reform also calls for stronger disclosure standards. Token issuers and related firms would face clearer reporting duties. These rules would give investors more information before they trade or buy crypto-linked products.

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