Japan maintains a cautious attitude towards cryptocurrency ETFs

ChainCatcher news, according to the Financial Times, highlights the conservative and distinctly different approach taken by Japanese regulators after the approval of spot cryptocurrency ETFs in the United States, Hong Kong, and other markets.

Japan has always positioned itself as a digital asset-friendly country, as part of its broader goal to become a larger asset management hub. However, at the policy level, Japan remains hesitant to relax restrictions, lift tax and regulatory barriers, and promote the widespread adoption of cryptocurrencies. Although some Japanese companies are preparing to launch digital asset products, tax and regulatory restrictions continue to be major obstacles.

In Japan, general cryptocurrency investment gains are considered miscellaneous income, with a maximum tax rate of 55%. However, when ETFs are traded on the securities market, they are treated as capital gains, resulting in a lower tax rate of about 20%, which provides investors with a more attractive option for diversifying their portfolios through digital assets.

Spot cryptocurrency ETFs will also enjoy tax benefits such as loss carryforwards. However, according to Keisuke Kimura, Vice President of the Japan Crypto Asset Business Association and former financial advisor at SMBC Nikko Securities, a lot of changes are needed to prompt regulators to take action and introduce these potential tax benefits.