Japan's Major Move to Embrace Mainstream Crypto

Japan is taking a significant step toward integrating cryptocurrencies into its financial system. The Financial Services Agency (FSA) is preparing a major reform package that would change how digital assets are taxed and regulated.

Japan's Proposed Crypto Reforms

The planned reforms would classify digital assets as financial products instead of "miscellaneous income." This is a big change because it would:

• Lower Taxes: Crypto gains, which are currently taxed at a high progressive rate (over 50%), would be subject to a flat 20% tax, similar to stocks and bonds. This new tax plan, which also includes a three-year loss carry-forward, is being reviewed for the 2026 fiscal year.
• Boost Regulation and Security: By moving digital assets under the Financial Instruments and Exchange Act, the FSA can enforce stricter rules on insider trading, disclosure, and investor protection. This would also pave the way for the launch of domestic crypto-linked ETFs, although regulators are still carefully considering risks like market manipulation and security.

Leadership Shake-Ups in the U.S.

Meanwhile, in the U.S., there are major changes happening at the IRS. Trish Turner, the Head of the IRS’s Digital Assets Unit, has left her position to join a private crypto tax firm. Her departure follows other leadership exits and comes as the U.S. takes its own steps to regulate the crypto sector, including a new federal law on stablecoins. Turner's move highlights the challenge regulators face in balancing innovation with oversight in the fast-moving crypto space.

August 2025, Cryptoniteuae