Japan's Finance Minister Advocates for Cryptocurrency Inclusion in Diversified Portfolios Amidst Tax Revision Considerations

In a recent development emphasizing the increasing global acceptance of cryptocurrencies, Katsunobu Kato, Japan’s Finance Minister, yet again pointed out their non-negligible role in diversified investment portfolios. While discussing the importance of cryptocurrencies in diversified investment portfolios in a speech given at the Web3 Conference WebX 2025 in Tokyo, Kato acknowledged the high risk associated with crypto assets due to their volatile nature. He, however, suggested that the risk can be appropriately managed, thus making cryptocurrencies a viable option for diversified investment, provided that there is a sound investment environment.

Japan’s Approach to Cryptocurrency Trading Environment

In light of the expanding user base of cryptocurrency, Mr. Kato revealed his intention to prioritize establishing a reliable trading environment for cryptocurrencies. This assurance was made during his speech, and it reinforces the Japanese Government’s National Strategic Communication Plan. The plan places a high emphasis on innovation in finance and technology while also focusing on the protection of consumers.

Financial Services Agency and Cryptocurrency Taxation

This discussion followed an essential suggestion made by Japan’s Financial Services Agency (FSA). The FSA had reportedly requested the government reconsider the current taxation of cryptocurrencies and proposed a flat tax rate instead. Given the current classification of digital asset gains as miscellaneous income, the tax rate on these gains varies between 15% and 56%, depending on the individual’s taxable income bracket. Subsequently, the FSA recommended that the government should reclassify cryptocurrency gains for separate taxation, much like stocks. This could lead to a flat tax rate of approximately 20.315% on cryptocurrency gains.

Bitcoin Gains and Tax Overhaul Proposal

Moreover, a recent report confirms that the local Bitcoin treasury company, Metaplanet, has been upgraded from a small-cap to a mid-cap stock in index provider FTSE Russell’s Semi-Annual Review for September 2025. This upgrade has propelled the company’s stock to be listed for inclusion in the FTSE Japan Index. This comes amid a growing climate of acceptance for cryptocurrency in Japan’s financial sector.

Adoption of Blockchain Technology by Japanese Financial Giants

Several influential Japanese Finance firms are taking initiatives to integrate blockchain technology. A notable example is SBI Group’s partnership with Chainlink, a blockchain oracle platform. This alliance aims to develop cryptocurrency tools for Asia’s financial institutions. Furthermore, SBI has formed new alliances with USD Coin (USDC) issuer Circle, XRP developer Ripple, and web3 company Startale. This aggressive embrace of technology represents a growing recognition of the immense potential that cryptocurrencies and blockchain hold in the finance industry.

Approval and Issuance of Japanese Yen-Denominated Stablecoins

Lastly, it is also predicted that the FSA is working towards approving the launch of Japanese yen-denominated stablecoins as soon as fall this year. These shifting views towards cryptocurrencies in Japan mark significant advancements in the widespread acceptance of digital assets as a potential tool in the future of financial systems. However, although these developments suggest a promising future for the cryptocurrency industry in Japan, the ultimate decision remains contingent on the regulators, investors, and the public’s willingness to accept technological change.

Japan’s Finance Minister Advocates for Cryptocurrency Inclusion in Diversified Portfolios Amidst Tax Revision Considerations