Japan is considering changing the way it taxes cryptocurrencies as part of the 2026 tax reform. The proposal, put forward by the Liberal Democratic Party and the Nippon Restoration Party, shifts the perception of cryptocurrencies from speculative tools to financial products that support household wealth accumulation.
Policy makers are contemplating a separate tax framework for crypto income, similar to stocks and investment funds, applicable to spot trading, derivatives, and crypto-related ETFs. Staking, lending rewards, and NFTs are still not clearly regulated, causing uncertainty. Only “defined crypto assets” according to regulations may qualify, excluding some tokens and platforms. The plan introduces a three-year loss carryforward mechanism, but profits and losses remain separate by income type. Exchanges will be required to report transactions to enhance compliance. The new classification could also impose taxes when leaving Japan, similar to stocks.
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