Japan is moving to bring crypto exchange-traded funds into its mainstream financial system through changes to securities law that would also lower taxes on digital asset gains. The proposal, announced by Finance Minister Satsuki Katayama, would shift crypto from its current treatment as a means of payment to the status of a financial product.

Legal framework for crypto ETFs

The core of the plan is an amendment to the Financial Instruments and Exchange Act. Under the proposed change, digital assets would be regulated in the same broad framework as listed securities. That would create a legal path for crypto ETFs and make regulated exposure available through ordinary brokerage accounts rather than limiting access to specialist crypto platforms.

The government’s stated direction is to integrate crypto more fully into Japan’s established financial architecture, while keeping it under clearer investor-protection rules. The measure has already passed the House of Representatives and is now being considered by the House of Councillors.

Brokerages and asset managers preparing products

If the legal change is approved, several major financial groups are expected to move quickly. Brokerage firms including BI Securities and Rakuten Securities are preparing to offer crypto ETFs, according to the source report. Other institutions said to be studying or designing products include Nomura Asset Management, SBI Global Asset Management, Daiwa Asset Management, and subsidiaries linked to Mitsubishi UFJ.

The proposal would therefore not only change the legal classification of crypto, but also widen the range of firms able to package and distribute digital-asset investment products within the country’s conventional brokerage system.

Tax changes tied to the reform

Another major element of the package is taxation. Under the planned framework, crypto taxes would be reduced from rates of up to 55% to a flat 20%. That would bring the tax treatment of crypto gains into line with stocks and investment trusts, according to the report.

The timeline described in the source separates the broader regulatory rollout from the tax change. The overall framework is expected to take effect in 2027 if the legislation clears parliament, while the 20% tax rate is set to apply from January 1, 2028.

New FSA unit planned

Alongside the legislative changes, Japan’s Financial Services Agency is expected to create a dedicated unit focused on crypto assets and stablecoins. The purpose, as described in the report, is investor protection as the market moves closer to the country’s mainstream financial sector.

The proposal signals a substantial policy shift for Japan: rather than treating crypto mainly as a payment-related category, the government is preparing to regulate it more like an investable financial asset. Whether that transition proceeds on the current timetable now depends on the bill’s progress through the House of Councillors and the final implementation of the planned framework.

Source: Cryptopolitan