Japan’s Financial Services Agency proposal to regulate crypto under the Financial Instruments and Exchange Act marks a shift from its 2019 amendments, which initially focused on exchange registration and custody rules, potentially reflecting a response to the 2021 Mt. Gox hack ($473 million lost) that exposed regulatory gaps.
Legalizing Bitcoin ETFs could align Japan with global trends, as the U.S. SEC approved spot Bitcoin ETFs in January 2024 after years of rejection, with trading volumes reaching $2.3 billion in the first week, suggesting a growing institutional appetite that Japan aims to capture.
Cutting crypto tax rates, currently up to 55% including inhabitant taxes per 2025 TokenTax data, could boost adoption, though no peer-reviewed studies yet quantify the economic impact, challenging the narrative that high taxes deter innovation in emerging markets like crypto.
