Japan”s Finance Minister, Satsuki Katayama, is spearheading a significant initiative to integrate digital assets into the country”s mainstream financial landscape. During a speech at the Tokyo Stock Exchange”s New Year opening ceremony, she emphasized the importance of stock and commodity exchanges in enhancing the accessibility of cryptocurrencies and blockchain assets to the broader public.
Katayama pointed to the successful implementation of crypto exchange-traded funds (ETFs) in the United States as a potential model for Japan. Currently, Japan does not have domestic crypto ETFs available for local investors, but the minister”s remarks suggest a shift towards adopting similar financial instruments in the future.
Declaring 2026 as the “first year of digitalization,” Katayama pledged government support for developing fintech-driven trading systems. This initiative aligns with broader fiscal policies aimed at addressing long-standing economic challenges such as deflation and sluggish growth.
Stablecoins and Banking Innovations
Japan has already begun laying the groundwork for this digital transition. In October 2025, JPC Inc. launched JPYC, the first yen-backed stablecoin, facilitating instant issuance and transfers on multiple blockchain networks, including Ethereum, Polygon, and Avalanche. Fully collateralized by yen deposits and government bonds, JPYC is gaining traction among businesses for payment and accounting purposes.
In tandem, the Japan Financial Services Agency (FSA) is considering allowing domestic banks to trade and hold cryptocurrencies similarly to traditional stocks and bonds. Major banks such as Mitsubishi UFJ, Sumitomo Mitsui, and Mizuho are piloting yen-backed stablecoins under the FSA”s Payment Innovation Project. These initiatives aim to enhance payment efficiency, with plans for dollar-backed stablecoins potentially following suit.
Regulatory Changes and Tax Reforms
The Japanese government is also poised to reclassify 105 major cryptocurrencies, including Bitcoin and Ether, as financial products, which will facilitate their integration into the conventional financial system. A new tax framework is set to reduce crypto tax rates significantly, from 55% to 20%. This reform will apply to spot trading, derivatives, and ETFs, allowing investors to offset losses for up to three years. However, income from staking, lending, and non-fungible tokens (NFTs) will remain subject to general taxation.
Katayama highlighted that these regulatory measures are part of a larger vision to transform Japan”s economy from one reliant on savings to one driven by investments, with digital assets playing a pivotal role in shaping the country”s financial future.
