Japan one step away from bitcoin ETFs and a 20% flat tax
A committee in Japan's Upper House has approved a bill reclassifying crypto as a financial instrument and cutting the tax rate to a flat 20%. The path to bitcoin ETFs on the Tokyo Stock Exchange is now open.
Japan is taking an important step towards regulated bitcoin ETFs. A committee in the Upper House has approved a bill that reclassifies cryptocurrencies as a financial instrument under the Financial Instruments and Exchange Act (FIEA) — after the Lower House already passed the bill earlier this year. Only a final vote in the full Upper House and formal promulgation stand between the proposal and law.
From payment method to financial instrument
Until now, crypto assets in Japan fell under payment services legislation. By reclassifying them as a financial instrument, Japan will treat digital assets legally similar to stocks and bonds. That is precisely the status needed to enable regulated investment products such as ETFs.
Tax rate from 55% to 20%
The fiscal impact is at least as significant: the current progressive rate, which can reach up to 55%, is being replaced by a flat rate of 20% — the same level applied to stocks and bonds. The new FIEA rules are expected to take effect during fiscal 2027; the tax cut is expected to follow shortly after.
When will the first ETFs arrive?
With the reclassification as a foundation, the Financial Services Agency (FSA) can start drafting implementing rules. Market participants and the Japan Exchange Group expect the first exchange-listed bitcoin trackers on the Tokyo Stock Exchange sometime between late 2027 and 2028.
Why this matters for European readers
Japan is one of the largest crypto markets in the world, and inflows via regulated ETFs there could — as previously seen in the US — drive extra institutional demand. You can also read more about today's rally in our article on the price surge.
Sources: Cryptotimes.io, Cryptobriefing.com, Currentaffair.today. Last checked: 15 July 2026.