Japan's 2026 Proposal Changes Cryptocurrency Taxation

The cryptocurrency sector in Japan is preparing for significant transformation with the draft tax reform for the fiscal year 2026. This new draft stands out by proposing the classification of crypto assets as financial products aimed at wealth generation. With these innovations, investors may start to pay more attention to cryptocurrencies as a long-term savings vehicle.

In the draft, various taxation models for crypto assets have been put on the table. According to the draft, gains derived from spot transactions, derivative products, and crypto exchange-traded funds (ETFs) will be taxed separately. This situation could empower investors and create a more predictable market environment.

Additionally, investors will encounter advantages such as the ability to carry forward their losses for up to three years. This reform proposal is seen as part of Japan's effort to align the cryptocurrency market more closely with traditional financial markets.

Another important detail in the draft concerns staking and crypto lending incomes. It is anticipated that such passive incomes will still fall under the general income tax category as in the current system. Furthermore, it is indicated that gains from NFT transactions may not be included in the classification of financial products. According to Japanese authorities, these issues are still not clear, and details will be determined by additional regulations to be introduced in the future.

If the reform is accepted in its current form, it could make Japan's tax structure for the crypto market more predictable and investor-friendly. Experts believe that this draft will particularly increase the interest of institutional and long-term individual investors in the Japanese crypto market. Therefore, it is essential for investors to closely monitor these developments.