This country is looking to cut crypto taxes to just 20% to attract investors #JapanFinance

Japan is evaluating whether to drop taxes on crypto to 20% to appeal to a broader set of investors. This proposal comes as the country looks to potentially classify crypto separately from securities under the Financial Instruments and Exchange Act.

Japan, home to the now-defunct Mt. Gox exchange — once responsible for more than 70% of Bitcoin transactions at its apex — has a complicated history with crypto. Following the hack that crippled Mt. Gox in 2014, Japan implemented stronger investor protections and enhanced government oversight, tightening regulations to curb bad actors.

Now, the country’s Liberal Democratic Party (LDP), the largest in Japan, has unveiled a proposal to reduce taxes on crypto investors, which run as high as 55%. Japanese parliamentarian Akihisa Shiozaki explained that the initiative aims to foster market development, safeguard investors, and create separate taxation for crypto. The party is gathering input on the proposal until the end of March.

“This proposal positions crypto assets as a new asset class that is different from securities under the Financial Instruments and Exchange Act, and aims to develop the market, protect investors, and achieve separate taxation,” said Shiozaki.

The move garnered praise from some members of the crypto industry. “This is how you start a nation’s strategic reserve, by the people for the people,” said Jeff Park, Bitwise’s Head of Alpha Strategies. “Japan is mobilizing to play their own tariffs war: subsidize non-U.S. financial asset ownership,” he added.

Last month, Japan’s Financial Services Agency announced it was considering categorizing digital assets as securities to enhance retail investor protection, potentially paving the way for the approval of spot Bitcoin exchange-traded funds (ETFs) in the country.