Japan's 2026 Proposal Changes Cryptocurrency Taxation

The cryptocurrency sector in Japan is preparing for a significant transformation process with the draft of the 2026 fiscal year tax reform. This new draft stands out with its proposal to classify crypto assets as financial products aimed at wealth creation. Investors may begin to pay more attention to cryptocurrencies as a long-term savings tool with these innovations.

The draft includes various taxation models for crypto assets. According to the draft, gains obtained from spot transactions, derivative products, and crypto exchange-traded funds (ETFs) will be taxed separately. This situation could strengthen investors' positions and create a more predictable market environment.

Additionally, investors will also encounter advantages such as the ability to carry forward their losses for up to three years. This reform presentation is seen as part of Japan's effort to bring its cryptocurrency market closer to traditional financial markets.

Another important detail in the draft concerns staking and crypto lending income. It is anticipated that these types of passive income will remain subject to general income tax, similar to the current system. Moreover, it is stated that gains from NFT transactions may not be included in the financial product classification. According to Japanese authorities, these issues are still unclear and will be determined by additional regulations to be issued in the future.

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