Japan FM Katayama Backs Crypto on Stock Exchanges; Declares 2026 ‘Digital Year One’
Finance Minister Satsuki Katayama signals a massive regulatory overhaul, proposing a flat 20% tax and integration with the Tokyo Stock Exchange to capture institutional liquidity.
Japan’s Finance Minister Satsuki Katayama has explicitly endorsed the integration of cryptocurrency trading into the nation’s traditional stock exchanges, marking a decisive pivot from the country’s historically restrictive regulatory stance. In her New Year’s address at the Tokyo Stock Exchange, Katayama designated 2026 as "Digital Year One," signaling a coordinated government effort to reclassify major digital assets as financial products under the Financial Instruments and Exchange Act (FIEA).
The Regulatory Pivot
The core of this policy shift is the dismantling of the aggressive tax regime that has long strangled domestic crypto adoption. Katayama confirmed the government is finalizing a proposal to replace the sliding-scale "miscellaneous income" tax, which currently hits investors with rates as high as 55%, with a flat 20% separate tax. This alignment with traditional securities taxation is designed to stem the capital flight of Japanese retail investors to offshore platforms.
The role of exchanges and market infrastructure will be essential… to ensure citizens benefit from digital and blockchain-based assets.
Institutional Machinery Mobilizing
The market’s infrastructure layer is already moving to capture this liquidity. Following the FSA’s signal to reclassify approximately 105 major tokens (including BTC and ETH) as securities, major domestic players like Nomura and SBI are reportedly expediting the launch of crypto-inclusive investment trusts. This move effectively clears the runway for Japan’s first spot crypto ETFs, a product class regulators had previously blocked, forcing Japanese capital into foreign proxies.
Why It Matters
Japan is playing catch-up, but with significant firepower. While the U.S. has dominated the ETF narrative, Japan’s household savings, traditionally parked in low-yield cash deposits, represent a massive dormant liquidity pool. By sanctioning crypto on the TSE and harmonizing tax rates, the FSA is not just "allowing" crypto; it is actively engineering a rotation of yen into digital assets to combat currency devaluation risks. The message to market makers is clear: the liquidity barriers in Asia’s second-largest economy are coming down.
