PANews reported on March 6 that according to The Block, Japan's Liberal Democratic Party (LDP) has drafted a crypto tax reform proposal, which plans to reduce the cryptocurrency tax rate from a maximum of 55% to 20%, and reclassify it as a financial product, subject to the Financial Instruments and Exchange Act, similar to the tax model for securities investment.

Currently, Japan treats cryptocurrency gains as “miscellaneous income” with a maximum tax rate of 55%. If the proposal is approved, crypto assets may receive independent tax treatment and lay the foundation for spot crypto ETFs.

The LDP is seeking public opinion until March 31, after which it will be submitted to the Financial Services Agency (FSA) for review. The FSA previously announced that it would announce new crypto regulatory directions by June at the latest.