Japan’s top financial regulator has indicated its intention to reclassify 105 cryptoassets, including Bitcoin and Ethereum, as financial products.

That’s according to Asahi Shinmun, which quoted Financial Services Agency sources as stating that the coins would become subject to policing under the terms of the Financial Products Transaction Act.

“The FSA will also ask the government to enforce tax rate reductions ahead of the next financial year,” Asahi wrote. “These will be similar to those used in stock trading.”

If the FSA gets its way, this could effectively put an end to Japan’s much-maligned crypto tax system for the traders of some of the world’s highest-cap tokens.

Capital gains rules to apply

At present, Japanese residents must declare their crypto-related profits as a “miscellaneous income” on annual tax returns.

This means that crypto traders in the country’s highest tax band must pay 55% tax on their earnings. In many other nations, crypto gains are taxed separately as capital gains.

The FSA’s move will change that, meaning that profits derived from these 105 coins will instead be subject to a flat 20% rate.

The agency has not yet made any official comment on the report.

However, the newspaper wrote that the FSA has used a wide range of selection categories to determine which of the coins should make its “approved” list.

These include project transparency, the financial stability and reputation of coin issuers, the soundness of their underlying technologies, and the perceived risk of price fluctuations.

New insider trading rules incoming

The FSA also reportedly wants to impose new restrictions on insider trading in the domestic crypto industry.

Asahi wrote that the agency will seek to ban individuals and companies with links to issuers or crypto exchanges from buying and selling coins “while in possession of important facts.”

These “facts” reportedly include undisclosed listing dates or information about an issuer’s financial security.

The FSA will reportedly look to include its requests in time for the budget, to be held in the first few weeks of 2026.

The Japan Virtual Currency Exchange Association, a self-regulating body that comprises the country’s top crypto exchanges, curates its own “green list” of highly trustworthy tokens.

Presently, the list is made up of 30 coins. It includes BTC and ETH, as well as high-cap altcoins like MATIC, XRP, and LTC.

Per its website, only coins that fulfil all of the following criteria can be placed on the green list:

• Coins that are listed by three or more JVCEA exchange members
• Tokens that have been listed by at least one JVCEA exchange member for over six months
• Coins that the JVCEA considers “appropriate” and allows exchange members to list “unconditionally”

Japanese firms have recently pivoted hard to Bitcoin and altcoin-buying, with the likes of Metaplanet leading the charge.

Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.