Japan's 2026 Bill Changes Cryptocurrency Taxation

The cryptocurrency sector in Japan is preparing for a significant transformation with the draft tax reform for the fiscal year 2026. This new draft draws attention by proposing the classification of crypto assets as financial products aimed at wealth creation. Investors may start to pay more attention to cryptocurrencies as long-term savings tools 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 may 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 position its cryptocurrency market closer to traditional financial markets.

Another important detail in the draft concerns income from staking and crypto lending. It is anticipated that such passive income will remain under the 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 details will be outlined in additional legislation to be released 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 this draft will particularly increase the interest of institutional investors and long-term individual investors in Japan's crypto market. Therefore, it is essential for investors to closely follow these developments.