Japan Could Tax Crypto as a Financial Asset

Japan’s Financial Services Agency has suggested the possibility of taxing crypto holdings as financial assets rather than as income.

The agency stated that it is important to consider whether crypto assets should be treated as investment targets for the general public when determining their tax treatment.

This change could result in those who hold a large amount of crypto earning a lower tax rate. Currently, crypto profits are taxed as income at rates up to 45% for those earning more than 40,000,000 yen ($276,000). In comparison, profits from sales of securities like shares are taxed at a flat rate of 20%.

The agency acknowledges that crypto assets have the potential to increase wages and household assets, but usage among individual investors is currently limited.

The country has been reevaluating its stance on crypto for the past two years, as high taxes likely contributed to a decline of crypto companies in Japan.