Japan’s House of Councillors passed Cabinet Bill No. 57 by majority vote on July 15, completing the legislative process to place regulated crypto activity under the Financial Instruments and Exchange Act.
The framework is now set in law. The wait for traders may continue, though, because the new market rules and the 20% tax treatment will only begin once the cabinet sets the effective date. That leaves the rollout pointing to 2027 or 2028.
Cabinet timing will decide when the new rules begin
Official records from the upper house show that the core crypto provisions will take effect on a date set by cabinet order within one year after the law is promulgated. If that happens in 2026, the tax rules would start on Jan. 1, 2027. If implementation comes in 2027, the start shifts to Jan. 1, 2028. The cabinet’s schedule will decide which calendar applies.
Oversight moves from the Payment Services Act to FIEA
The reform shifts crypto trading regulation away from the Payment Services Act and into the Financial Instruments and Exchange Act. Cryptoassets remain legally different from securities, but regulated activity will operate under a compliance structure closer to securities markets.
Materials from Japan’s Financial Services Agency add disclosure and registration requirements for crypto sales, issuer-controlled token offerings and lending. The framework also covers asset screening, custody, customer protection and insider-trading controls.
Exchanges and intermediaries can now prepare for the new regime. Their obligations will apply once the rules take effect. Detailed operating requirements still need to be set through cabinet orders and Financial Services Agency regulations.
Tax law is already in place, but the crypto clauses are dormant for now
The tax side of the reform has already passed, but its crypto provisions remain dormant until the Financial Instruments and Exchange Act trigger conditions are met. Japan passed and promulgated the FY2026 tax revision on March 31 as Law No. 12. Once activated, qualifying gains will be subject to a 20% combined tax rate, broken down into 15% national income tax and 5% local inhabitant tax.
The 20% rate applies only when investors sell qualifying tokens through registered crypto businesses and the assets appear on Japan’s official registry.
Unused losses within the same tax-defined crypto category can be carried forward for three years, subject to conditions. Tokens, venues and transactions outside that definition will stay under the current treatment.
Reporting starts a year after the tax and loss rules take effect
The reporting regime arrives one year after the tax and loss provisions begin. Under the Ministry of Finance framework, businesses must submit customer identity information, Japan’s My Number identifier and transaction details to tax authorities by Jan. 31 following the trading year.
If the 20% system starts in 2028, the reporting would cover trades in 2029, with the first filings due on Jan. 31, 2030.
Investment-product pathway remains conditional
The reform package also sketches a possible route for crypto investment products. It brings crypto investment management and advisory services under the Financial Instruments and Exchange Act and anticipates that some investment trusts may hold registered cryptoassets that qualify under the tax rules.
That treatment still requires a separate amendment to the enforcement order of the Investment Trust Act. The text does not mention spot Bitcoin ETFs and does not approve any product. Japan’s Financial Services Agency said in October 2025 that, under the earlier framework, the formation and sale of domestic crypto ETFs were prohibited. Even if the implementation rules open a new route, sponsors would still need to clear the relevant product and listing reviews.
Formal promulgation and detailed rules are the next milestones
The next key dates now depend on when the law is formally promulgated, when the cabinet puts the Financial Instruments and Exchange Act changes into force, and when the Financial Services Agency finishes the detailed rules. The 20% tax treatment will apply from the next tax year after those conditions are met.