Recently, the country has taken significant action. The Japanese authorities disclosed a tax reform plan for cryptocurrencies in 2026, which could be the most important policy adjustment in the Asian crypto market in recent years. We need to take a close look at this.

Let's start with the most obvious change. Previously, making money from trading cryptocurrencies in Japan could incur taxes as high as 55%, which is even higher than stock trading taxes. After the reform, if you trade mainstream assets like BTC and ETH on compliant Japanese exchanges, the profit tax rate is directly cut to 20%. This is not a small adjustment; it's a substantial benefit. Moreover, the classification of crypto assets will also change from "miscellaneous income" to "financial products," enjoying the same tax treatment as stocks.

But don’t celebrate too early; there are many pitfalls in the details. First, losses can now be offset against taxes. Trading losses can be deducted from profits over the next three years, which is good news for those who are currently trapped. However, the 20% preferential tax rate only applies to mainstream coins traded on licensed Japanese exchanges. What about NFTs, staking yields, DeFi products? Sorry, they might still be taxed at the old, higher rates.

There’s an even more painful point—the regulatory authorities hinted that a "exit tax" might be introduced in the future. That means if you want to transfer assets to an overseas wallet, you might have to pay a fee. This is essentially drawing a circle, telling everyone: use our system to enjoy the benefits; once you leave, there’s no guarantee.

Why is Japan doing this? Frankly, it’s very ambitious. Over the years, Singapore and Hong Kong have attracted a lot of capital and trading volume, and Japan clearly wants to take back these opportunities from others. Lower taxes are the bait, strict regulation is the sieve—they want large, compliant funds and institutional investors. At the same time, this reform is also paving the way for the launch of crypto spot ETFs, giving Japanese investors more options in the future. The overall logic is essentially "recruitment"—offering sweeteners and setting rules, but only within a designated circle.

What impact will this have on the market? First, long-term players trading through compliant channels in Japan will benefit, especially institutions and conservative investors. Second, DeFi enthusiasts and NFT traders might be temporarily "forgotten," as the new policies don’t offer much help to them. Most importantly, the landscape of the Asian crypto market may be reshuffled. If Japan’s policies are truly implemented, it will further strengthen the competitiveness of compliant exchanges, making platforms that emphasize regulatory friendliness more attractive.

In the long run, this actually reflects a trend: major global economies are shifting their attitude toward the crypto market. From outright rejection to conditional acceptance, from high taxes to relatively friendly tax regimes, it’s a recognition of the value of cryptocurrencies as financial instruments. Of course, the prerequisite is that you operate within the officially approved framework.

For Chinese-speaking investors, it’s worth paying attention to the specific timeline of Japan’s policy implementation and whether other Asian countries will follow suit with adjustments. The market often reacts in advance to such expectations.