Japan's New Crypto Framework Is a Win for Institutions — Startups, at Home and Abroad, Still Need Clarity

Japan's Lower House has passed legislation that will move cryptocurrencies out of the Payment Services Act and into the Financial Instruments and Exchange Act, placing digital assets under the same regulatory framework as stocks and bonds. Once it clears the Upper House and takes effect, the capital gains tax on major tokens is set to fall from a maximum of 55% to a flat 20%, and the reform opens a path toward crypto exchange-traded funds. This is one of the most significant shifts in Japanese financial policy in years.

I was recently quoted on this in Bloomberg and Japan Times, where I said the strong enforcement built into the bill will help create a high-trust ecosystem, because the punishments for bad actors are now clear. I stand by that. But in my Bloomberg conversation, I made a point that I think deserves more room than a soundbite allows: this law is genuinely good for institutions, and it is not yet good enough for startups — whether those startups are coming to Japan from abroad or are already building here.

As president of the Asia Web3 Alliance Japan, I work with both sides of that divide every day. This is my attempt to lay out, in full, why I believe that, and what I think Japan should do next.