Japan Lawmakers Propose Crypto Tax Reforms, Yen Stablecoin Support

A group of lawmakers within Japan’s Liberal Democratic Party (LDP) are seeking reforms to the country's cryptocurrency taxation system, as well as support for initiatives for the development and adoption of yen-denominated stablecoins.

According to a Monday Nada News report, the LDP’s Parliamentary Association for the Promotion of Blockchain delivered recommendations to Finance Minister Satsuki Katayama, including provisions on stablecoins, exchange-traded funds (ETFs), central bank digital currencies (CBDCs), and applications for blockchain technology.

The document proposes doubling the leverage cap for retail cryptocurrency derivatives trading and establishing a framework for ETFs tied to digital assets.

Katayama reportedly responded to the proposals by saying Japan “must move forward without falling behind global developments,” referencing crypto legislation and frameworks in the United States.

“We must advance initiatives to expand on-chain finance across Asia — including the development and adoption of yen-denominated stablecoins,” LDP member Junichi Kanda said at a Monday press conference.

Finance Minister Satsuki Katayama (second from left) in a December 2024 meeting on Promotion of a Digital Society. Source: LDP

The recommendation came about two months after the Japanese government approved changes to allow classification of crypto assets as financial instruments rather than solely as a method of payment. The country’s financial watchdog, the Financial Services Agency, also reportedly planned to amend its regulatory framework to allow crypto ETFs.

Related: Japan PM Takaichi disavows ‘Sanae Token’ after memecoin hits $28M peak

Japan’s potential entry into the global $320 billion stablecoin market, now dominated by tokens pegged to the US dollar, comes after US lawmakers enacted legislation for a payment stablecoin framework, the GENIUS Act. According to an April report from the Bank for International Settlements, the market capitalization of Japanese yen-denominated stablecoins was less than 0.01% of US dollar-pegged coins.

Source: Pexels

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