Japan plans to implement a flat 20% tax on cryptocurrency profits, aligning the treatment of digital assets with equities and investment trusts. The proposal aims to simplify tax reporting for investors and reduce the current burden created by progressive taxation, which can push effective rates far higher during bull markets.
Officials expect that harmonizing crypto taxes with traditional investment products will encourage domestic trading and help retain blockchain startups that have increasingly moved operations overseas. The policy shift comes as Japan works to strengthen its position as a regulated yet innovation-friendly hub for digital assets.
The government is also considering additional measures to streamline compliance and lower administrative friction for exchanges. Market participants say the move could significantly improve liquidity in Japan’s crypto market once fully implemented.
