Japan plans to review legislation on digital assets: reforms and taxes

The Financial Services Agency of Japan (FSA) is approaching changes in the legislative framework concerning digital assets. As part of this revision, cryptocurrencies and other digital assets need to be classified as full-fledged financial products, significantly raising their status and regulatory oversight. If these changes come into effect, digital assets will be treated alongside traditional securities, which could impact the market and the rules governing their circulation.

A group of experts formed by the FSA has begun working on analyzing the current legislation on digital assets and preparing proposals for reform. One of the key objectives will be to ensure a higher level of market transparency. Specifically, mandatory disclosure of more detailed information about transactions involving digital assets will be required, which is expected to reduce risks and increase trust among market participants.

To this end, the experts plan to consult with the Financial System Council, which will hold a meeting in the fall. It is expected that the proposals developed by the experts will be presented to the Japanese government soon.

One of the most important aspects of the proposed changes is the reduction of the tax rate on digital assets. Under the new system, the tax on income from digital assets will be lowered from the current 55% to 20%, which, according to experts, will make Japan more attractive for economic growth and stimulate national development.

Additionally, there is a possibility that the new rules will be incorporated into securities legislation or into a set of regulations governing payment instruments. This would create a clearer and more accessible legal environment for all participants in the digital technology market.

Japanese Prime Minister Shigeru Ishiba has stated that the development of the national market for digital assets and Web3 technologies is of «extremely important significance» for the country’s future progress, including addressing pressing everyday issues and supporting the economy.

Thus, the revision of the legislation on digital assets could become a significant step in developing Japan as a hub for sustainable financial technologies and cryptocurrency startups.