JCBA & JVCEA Submit Tax Reform Request for Cryptoassets for FY2026
Just like for this fiscal year (see link at the bottom), the Japan Cryptoasset Business Association (JCBA), jointly with the Japan Virtual and Crypto assets Exchange Association (JVCEA), has compiled a tax reform request for cryptoassets for FY2026 and submitted it to the government.
Purpose of This Request
Web3.0 is the "Internet of Value" that has been added as a new layer on top of conventional internet architecture with the rise of blockchain technology. This enables the co-creation, preservation, and exchange of value without intermediaries, which was not standardly implemented in the internet alone.
Additionally, a major characteristic of Web3.0 is that public blockchains and smart contracts built as open-source software promote technological innovation beyond borders and organizations, potentially creating innovative services more rapidly than ever before. In Japan, the government has indicated its policy to proceed with environmental preparations for promoting Web3.0 as a national strategy to strongly support Japan's Web3.0 innovation.
In response to these policies, regarding taxation, the FY2025 ruling party tax reform outline clearly stated that while developing legal frameworks such as industry laws for certain cryptoassets, it would also consider reviewing taxation related to cryptoasset transactions. Furthermore, "Digital Nippon 2025" clearly stated the goal of positioning cryptoassets as a "new asset class" with reliability and soundness in society through disclosure obligations, insider regulations, separate taxation introduction, etc., in response to the rapid increase in cryptoasset investments, for ensuring international competitiveness, market soundness, and investor protection.
In the United States, following President Trump's inauguration, a major transformation in cryptoasset policy is being advanced based on the vision of making the US the "world's crypto capital." It is clear that for Japan to regain leadership in the Web3.0 industry, it is essential to implement measures that strengthen international competitiveness as an industry, referencing US developments.
However, the current tax system discourages citizens from accessing or using cryptoassets, and there is no doubt that taxation has become the greatest obstacle for Japan to achieve a comeback in the Web3.0 field. This current situation is fatal for the government's goal of promoting Web3.0. To avoid repeating the failures in the internet industry and to deliver the comeback blow in Web3.0 as the government aims, it is essential to make the tax system related to cryptoassets neutral and recognize treatment equal to other financial assets such as stocks. Currently, regulatory discussions are progressing toward regulating cryptoassets under the Financial Instruments and Exchange Act similarly to other financial assets, and this represents a once-in-a-lifetime opportunity to apply neutral taxation as financial products to cryptoassets in alignment with these regulatory developments.
In reviewing this tax system, based on the considerations in the FY2025 ruling party tax reform outline, examining a system that does not hinder blockchain transactions through wallets, which are fundamental to Web3.0, aligns with global standards. By establishing global standard taxation, individual trading will become more active, domestic Web3.0 development will be expected with support from domestically established related regulations, business support for existing startups and other on-chain related businesses will be promoted, and this will align with national strategies that have promoted startup development and Web3.0 nation-building.
Both associations request the ideal cryptoasset tax system as described above to promote cryptoasset utilization, market activation, and related industry development, and will continue discussions with relevant parties.
Document Downloads
- Tax Reform Request for FY2026
- [Reference] "FY2026 Tax Reform Request" Overview
- [Reference] International Tax System Comparison Table for Cryptoassets - July 2025 Revised Edition
Norbert Gehrke
