Japan's 2026 Bill Changes Cryptocurrency Taxation

The cryptocurrency sector in Japan is preparing for a significant transformation with the draft tax reform proposal for the fiscal year 2026. This new draft stands out by suggesting that crypto assets be classified as financial products for wealth creation purposes. Investors may start to place more importance on cryptocurrencies as long-term savings vehicles with these innovations.

Within the content of the draft, various taxation models for crypto assets are being considered. According to the draft, gains from spot transactions, derivative products, and crypto exchange-traded funds (ETFs) will be taxed separately. This situation could strengthen the position of investors and create a more predictable market environment.

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

Another important detail in the draft pertains to staking and crypto lending incomes. It is anticipated that such passive income will remain under the general income tax system as it does currently. Moreover, it is noted that gains from NFT transactions may not be included in the financial product classification. According to Japanese officials, these issues are still not clear, and details will be determined by additional regulations to be issued in the future.

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