Japan's proposed amendment to the law is a "securities-like financial product", income tax falls, and bitcoin spot ETFs are expected to be released

The Japanese Ministry of Finance is reportedly studying to position encryption assets as financial products equivalent to securities, planning to announce the direction of system reform in June this year. The new regulatory system is expected to lift the ban on BTCSpot ETF in Japan and may also drop the current 55% income tax on encryption assets to 20%. (Background: Japanese Ministry of Finance plans: Cryptocurrency as an investment asset, shifting from a payment tool to a financial product) According to Nikkei News, the Japanese Ministry of Finance is studying to position encryption assets as financial products equivalent to securities, in order to enhance investor protection and require related companies to provide more detailed information disclosure. The Ministry of Finance is currently holding closed-door research meetings with experts to review the adequacy of the current regulation on Virtual Money. It is reported that the Japanese Ministry of Finance has begun designing a trap system, positioning encryption assets as financial products similar to securities. The Japanese government will announce the system reform policy in June this year, and after discussions in the Financial System Committee in the autumn, will amend the law in the regular parliament in 2026. Bloomberg recently reported that the expert study group set up by the Japanese Ministry of Finance generally believes that Cryptocurrency is beginning to be positioned as an investment target, seemingly in response to actions such as the approval of BTCSpot ETF and EthereumSpot ETF by the US SEC, as well as the Trump administration's support for the Cryptocurrency industry. Worth noting is that the new regulatory system is expected to lift the ban on BTCSpot ETF in Japan, and may also drop the current 55% income tax on encryption assets to 20%, same as financial income tax, in order to protect investors and revitalize the market. However, the specific details of the new regulatory system, such as whether the current securities framework of the Financial Instruments and Exchange Act will be applicable to all encryption assets or only those assets approved as ETFs in the US, such as BTC and Ethereum, will be ultimately determined in the future. Japanese encryption media CoinPost pointed out that Japan's current tax system for Cryptocurrency is considered relatively high compared to other major countries, imposing a heavy tax burden on investors, while other developed countries have implemented more flexible system designs, such as offering preferential treatment for long-term holdings or implementing tax exemption within certain limits. If encryption assets are recognized as financial products equivalent to securities in the future, from the perspective of investor protection, it is expected that mandatory information disclosure will be carried out according to the Financial Instruments and Exchange Act, and monitoring of fraudulent transactions will be strengthened. This move is also expected to enhance market credibility, encouraging institutional investors to enter the market and making it easier to cooperate with existing Financial Institutions.