The Financial Services Agency (FSA) of Japan is set to conduct a comprehensive review of the country’s crypto laws. This review aims to evaluate the possibility of loosening regulations and reducing capital gains taxes, which could significantly impact the crypto market.
According to a report by Bloomberg on September 30, the FSA is primarily assessing Japan's existing Payment Services Act. The main question is whether cryptocurrencies should be classified as a payment option or as an investment tool. An anonymous official indicated that crypto is predominantly used for investment in Japan, which might necessitate a shift in the legal framework.
Throughout 2024, Japanese crypto trading has shown signs of recovery. A reduction in capital gains tax from up to 55% to 20%, similar to stock taxation, could encourage further growth. The FSA is also considering measures to enhance consumer protection, while business leaders are advocating for less stringent regulations.
Another layer of complexity lies in the upcoming elections in Japan. Prime Minister Fumio Kishida is not seeking re-election, and his party has nominated Shigeru Ishiba as his successor. Although Ishiba has expressed support for existing economic policies, his selection follows notable disputes within the Liberal Democratic Party (LDP).
As Japan’s largest corporations, including the leading bank and electronics giant Sony, push for relaxed measures, the FSA may consider their demands seriously. With the political landscape changing, the future of crypto regulations in Japan remains uncertain.
