Japan’s new crypto tax could wake ‘sleeping giant’ of retail investors

Japan's financial watchdog, the Financial Services Agency (FSA), has proposed a significant reduction in the maximum tax rate on digital assets from 55% to a flat 20%, aligning it with traditional securities. This move is seen as a major step in moderating the government's stance toward crypto, which has evolved from a gray area to being part of the national growth plan. Previously, crypto was taxed as miscellaneous income, leading to a maximum penalty of 55% (45% income tax plus 10% inhabitant tax). Industry observers believe this high tax rate has suppressed retail trading volume, making Japan a "sleeping giant" in the crypto space. The proposed change is expected to onboard many new retail users, with industry leaders anticipating increased on-chain activity, new product offerings like crypto ETFs, and greater corporate involvement from major Japanese firms like Sony and Sega. While regulations have stabilized since initial shocks like the Mt. Gox and Coincheck hacks, the tax reform is viewed as the critical catalyst needed to unlock significant domestic market growth.

(Source：Cointelegraph)