Japan’s Ruling Party to Slash Crypto Capital Gains Tax to 20%

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Japan’s ruling political party, the Liberal Democratic Party (LDP), is advancing a comprehensive regulatory reform for cryptocurrencies.

This reform aims to reduce the capital gains tax on crypto to 20% and classify digital assets as a distinct asset class. According to LDP lawmaker Akira Shiizaki, cryptocurrencies will be designated as a new asset class, separate from securities under the Financial Instruments and Exchange Act.

The LDP’s proposal also calls for cryptocurrency derivatives trading to receive the same tax treatment as spot investments. Additionally, it suggests deferring taxes on crypto-to-crypto swaps until they are exchanged for fiat currency, at which point taxes would be calculated collectively.

These regulatory changes indicate that Japan is becoming more receptive to cryptocurrencies, marking a shift from its previously cautious stance on digital asset investment and moving away from promoting investment in US debt assets.