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Ahmed Barakat
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Japan is making the most progress in crypto regulation in Asia. The country that previously taxed crypto profits up to 55%, which drove the liquid into the sea and cemented its reputation as a regime hostile to active traders, now published new rules to allow foreign stablecoins to rely on the type of use as payment instruments from June 1. It is one of the visible pieces of the most extensive regulatory framework from the restructuring of the Tokyo package.
Even last year, the Japanese National Tax Authority currently treats most crypto gains as “various currencies” in a category that has progressive rates that reach 55% at the top. This explains why the fastest growing entrepreneurs, marketers, and Web3 startups have been moving to Singapore and Dubai for years.
The change involves a fixed 20% corporate income tax, similar to the rate applied to companies and trusts under Japan’s Financial Instruments and Exchange Act (FIEA). The Japan Cryptoasset Business Association has been making it clear in its papers: competition for Asian Hubs tax retail crypto profit at 0-15%.
But the tax rate is half way. The other half is legal redistribution. In order for the 20% rate to be applied, crypto assets, especially major tokens such as BTC and ETH, must also be classified as financial instruments under the FIEA instead of being in the liberal jurisdiction of the Payment Services Act. This has one effect: it allows ETFs to operate legally, under the supervision of licensed brokers.
Bitcoin ETF Gateway: What Institutions Are There Already
The US base is where all the Japanese managers are working. Bitcoin ETFs listed in the US, which were approved by the SEC in January 2024, attracted billions in inflows within weeks of their launch, proving a market that Japan has not been able to replicate under existing regulations.
European UCITS institutions have followed a similar path, with large asset managers building crypto-assets under MiCA-adjacent supervision.
The Japanese base continues, as Nomura’s subsidiary Laser Digital and Mitsubishi UFJ Trust and Banking have both been testing securities and investment units under FIEA standards. They have publicly argued that similar structures could be used to regulate Bitcoin and Ethereum transactions once the tax and tax laws are in place.
It’s happening again this week, SBI Holdings has launched a crypto ETF portfolio in Japanpositioning itself ahead of the potential domestic market.
The FSA’s June 1 stablecoin framework is part of the organization’s policy. SBI VC Trade is actively looking at services provided by the USDC under the new rules, which also qualify stablecoins as Electronic Payment Instruments under the Payment Services Act. This regulates stablecoin rails, licensed intermediaries, and uniform standards for foreign issuers, a stable sector that the ETF market needs.
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Japan vs. The Global Crypto Regulatory Race: Where the FSA Stands Against the CLARITY Act and MiCA
Legislative changes are not uncommon. Across the Pacific, the US Senate Banking Committee advanced the CLARITY Act, which defined the boundaries between the SEC and the CFTC. Galaxy Digital’s head of proven research, Alex Thorn, puts the CLARITY Act’s chances of becoming law in 2026 at 65% to 75%.
The EU MiCA process has already started. Hong Kong launched Bitcoin and Ethereum ETFs ahead of Japan. Singapore maintains a 0% profit margin on crypto. Japan’s advantage is not speed; and deep, with Japan’s domestic savings measured in trillions.
Researchers at Latham & Watkins have shown that Japan is moving towards a “law-first but lenient” approach, closer to MiCA in philosophy than to the US-style wars.
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