Japan May Introduce Bitcoin ETFs as Regulator Suggests 20% Flat Tax on Crypto Gains and 'Financial Product' Classification: Report

Tax Code Revision Proposal: Japan's Financial Services Agency (FSA) is set to propose a revision to the tax code that could allow for domestic cryptocurrency exchange-traded funds (ETFs) by the end of August.

New Tax Treatment for Cryptocurrencies: The proposal includes changing the tax treatment of cryptocurrencies to a flat 20% rate, moving away from the current system where gains are taxed up to 55% as "miscellaneous income."

Reclassification of Cryptocurrencies: The FSA plans to categorize cryptocurrencies as a "financial product" under the Financial Instruments and Exchange Act, which may facilitate the approval of cryptocurrency ETFs in Japan.

Recent Developments in Cryptocurrency: This proposal coincides with Japan's advancements in the cryptocurrency sector, including the authorization of JPYC Inc. to issue yen-backed stablecoins on various blockchain platforms.