Japan is set to implement a major revision to its cryptocurrency tax policy, moving toward a flat 20% tax on digital asset gains—bringing the sector in line with stocks and investment trusts, according to Nikkei. The initiative, backed by the central government and ruling coalition, marks the country’s most meaningful crypto-related policy shift in years and signals an increasing willingness among regulators to treat crypto as a mature investment category.

The proposed framework would shift crypto earnings into Japan’s separate-taxation system, where specific income types are taxed independently of salary or business income. Under this structure, the 20% levy would be split between national authorities, receiving 15%, and local governments, receiving 5%. Lawmakers are expected to incorporate the change into the 2026 tax reform plan, set for completion at the end of December.

For retail investors, the overhaul would significantly reduce the financial burden. At present, crypto profits fall under a progressive tax schedule that can climb to as high as 55%, a rate widely viewed as a deterrent for traders and a barrier to domestic growth.

The timing aligns with rising activity across Japan’s regulated crypto exchanges. The Japan Virtual and Crypto Assets Exchange Association reported that spot trading volumes surpassed $9.6 billion in September, highlighting steady momentum in the country’s digital asset markets.