Japan’s Crypto Firms Prepare for Potential Regulatory Changes as Policy Talks Advance

In Japan, a more substantive policy discussion is underway. The Financial Services Agency (FSA) is reportedly preparing to recognise crypto assets under a framework closer to regulated financial products. If adopted, the change would be more than a routine market headline and could reshape how firms operate under domestic rules.

Tax reform is also being discussed. As reported by CCN, the current system, where crypto income is taxed as “miscellaneous income” at rates up to ~55% – could move to a flat ~20% capital gains tax, aligning crypto with the treatment applied to some traditional investments.

At the same time, Japan is laying groundwork for tokenised assets, stablecoins, and non-custodial intermediaries. Taken together, these efforts indicate an ecosystem that may be moving toward broader participation, although timelines and final requirements remain subject to the legislative process.

What This Means For The Market

If implemented, these reforms could increase regulatory clarity and standardisation for Japan’s crypto sector. Market participants have argued that clearer rules can support compliance, reduce uncertainty for institutions, and enable a wider range of products, including tokenised assets such as real estate or securities, subject to applicable laws.

However, regulatory change does not remove market risk, and crypto trading and tokenised products can remain volatile even under tighter oversight.

The Specifics: What’s Changing & Why It Matters

Legal reclassification

If crypto is reclassified from a “payment asset” to a “financial product,” it could affect investor-protection requirements, exchange obligations, and the types of products permitted in the market. A March 2025 Nikkei report flagged this move toward financial reclassification early.

One possible downstream outcome discussed by market observers is the eventual consideration of spot crypto ETFs in Japan, although any such products would depend on regulatory approval and market infrastructure.

Tax overhaul

A shift to a flat 20% tax rate could change how investors plan around long-term holdings. At the moment, gains are taxed as miscellaneous income, a category that can push tax rates as high as 55% (according to Law.asia).

Separate proposals discussed in local reporting include potential loss carry-forward provisions, which could allow investors to offset future gains with previous losses, similar to mechanisms used in some traditional financial markets (Law.asia).

Structural reform

• New licenses for intermediaries who don’t hold assets outright.
• Stablecoin issuers may be given more flexibility under revised rules.
• Exchanges may face requirements tied to net assets, governance, and KYC/AML compliance.

Competition heats up

Regulatory change can alter competitive dynamics. Banks, brokers, non-traditional players, and digital-native platforms may seek licences or partnerships as the framework becomes clearer.

IPO Genie and the Broader Shift

IPO Genie is one of the platforms referencing these policy discussions in its positioning. According to the project’s own materials, it describes itself as a platform focused on tokenised crypto assets, and it has indicated that a revised Japanese framework would be relevant to its intended operating model.

• Project website (for reference): IPO Genie.
• The project has also referenced a “$IPO” token sale in its communications; the terms, timelines, and any regulatory status should be verified independently.

The Opportunity — and the Caution

Policy proposals can create new possibilities for regulated market activity, but they also come with uncertainty and implementation risk.

• Regulatory reform still has to pass. The FSA aims to submit a bill as early as 2026.
• Market volatility remains a factor. Regulation does not eliminate price risk.
• Tokenised assets may carry unique legal and tax complexity, especially across borders.
• Marketing claims around crypto products vary widely; transparency, governance, and clear disclosures remain important signals for readers to evaluate.

Final Word

In discussions around “Japan crypto regulation 2025,” the central theme is a potential move from payment-instrument treatment toward a framework closer to financial products. If enacted, it could broaden the range of permitted offerings and clarify expectations for firms operating in the country, while leaving open questions about timing and scope.

This article is for informational purposes only and does not constitute financial or investment advice.

This outlet is not affiliated with the project mentioned.