Japan's Lower House Passes Bill to Regulate Crypto Assets Under Financial Instruments Framework
Quick Look
- Japan's Lower House has passed a bill to regulate crypto assets under its financial instruments framework, potentially leading to lower taxes and the introduction of crypto ETFs.
- The changes, expected to take effect next year, will move crypto under the Financial Instruments and Exchange Act.
AI-generated summary
Why It Matters
Japan's Lower House has passed a bill that will bring crypto assets under the country's financial instruments framework. This move shifts crypto from a payment-focused regime to a financial-market framework, aligning it more closely with the regulation of stocks and bonds.
Japan’s Lower House reportedly passed a bill that would bring crypto assets under the country’s financial instruments framework, potentially opening a path to exchange-traded funds (ETFs) and lower tax treatment for digital assets.
The bill would move crypto assets closer to the regulatory treatment of stocks and bonds by subjecting them to stricter trading rules, Bloomberg reported on Thursday. The legislation is expected to take effect next year after going through the Upper House.
The proposed changes could lower the capital gains tax on crypto assets like Bitcoin (BTC) and Ether (ETH) from a current maximum of 55% to a 20% flat rate, in line with stocks and bonds. The tax change is expected to take effect in 2028.
Official records showed the bill had cleared the Committee on Financial Affairs on June 10, although the bill-tracking page had not yet updated the plenary vote field at the time of writing.
Status of the bill on the House of Representatives website. Source: House of Representatives of Japan
Japan shifts crypto into a financial-market framework
The latest parliamentary advance follows months of signals that Japan was preparing to shift crypto from a payment-focused regime into a financial-market framework.
In November 2025, media outlet Asahi Shimbun reported that the Financial Services Agency (FSA) had decided to apply the Financial Instruments and Exchange Act to crypto, including Bitcoin (BTC), Ether (ETH) and other tokens handled by local exchanges.
Related: SBI Shinsei links bank deposits to crypto rewards in Japan: Nikkei
FSA materials dated April 2026 said the proposal would move crypto-asset transaction rules from the Payment Services Act to the Financial Instruments and Exchange Act.
The FSA said the bill would treat crypto assets as financial products separate from securities, while introducing disclosure rules, tighter exchange oversight, insider trading restrictions and stronger penalties for unregistered operators.
The proposed framework would also require crypto-asset transaction business operators to publish information on the assets they handle, while issuers of certain assets would face disclosure requirements when conducting offerings or secondary distributions.
The shift could also open the door to crypto-tracking ETFs in Japan, giving local investors a regulated route to digital asset exposure beyond crypto exchanges and listed companies with token holdings, Bloomberg reported.
What to Watch
AI outlook — possibilities, not facts
The bill will be passed by the Upper House.
Likely · Within months
Crypto assets will be treated as financial products separate from securities.
Very likely · Immediate
Crypto ETFs will become available in Japan.
Possible · Medium term
Open Questions
- What specific disclosure rules will be introduced for crypto-asset transaction business operators?
- What are the exact penalties for unregistered operators under the new framework?
- Will the Upper House pass the bill without amendments?
- What is the timeline for the introduction of crypto-tracking ETFs in Japan?
