Japan's House of Councilors approved Cabinet Bill 57 by majority vote on July 15, completing Diet passage of legislation that moves regulated crypto activity into the Financial Instruments and Exchange Act (FIEA). The 20% tax rate on crypto gains isn't here yet — it may not take effect until 2027 or 2028, depending on when the Cabinet order enforcing the FIEA changes is issued.
How the tax rate actually kicks in
The 20% rate — 15% national income tax and 5% local inhabitant tax — applies only when investors sell eligible tokens through registered crypto businesses and the assets appear on Japan's official register. Unused losses can be carried forward three years. But the core crypto provisions of the FIEA transition take effect on a date set by Cabinet order within one year of promulgation. If enforcement happens during 2026, the tax rules start Jan 1, 2027. If enforcement slips into 2027, the start date becomes Jan 1, 2028.
Japan enacted and promulgated the fiscal 2026 tax amendments as Law No. 12 on March 31, but the crypto provisions are dormant until the FIEA trigger is satisfied. The Ministry of Finance framework also requires businesses to provide tax authorities with customer identities, My Number, and transaction details by Jan 31 after the trade year.
What the FIEA shift actually changes
The reform moves crypto transaction regulation from the Payment Services Act to FIEA. Crypto remains legally distinct from securities, but it gains a securities-market-style compliance framework. That includes disclosure, registration, asset screening, custody, customer safeguards, and insider-trading controls for crypto sales, issuer-controlled token offerings, and borrowing.
The timing isn't great for exchanges that hoped for a quicker tax cut — but the structural shift is bigger than a single rate. It signals that Tokyo sees crypto as an asset class warranting capital-market discipline, not just a payment method.
XRP's home-field advantage
XRP dominates Japan's cash inflows with $21.7 billion in JPY on-ramp volume and SBI's remittance infrastructure. The new tax regime could lock that advantage further, since registered businesses handling eligible tokens on the official register are the only ones where the 20% rate applies. Ripple's network already has deep ties to Japanese banking via SBI Holdings, and the regulatory clarity may reinforce that position.
No spot Bitcoin ETF — yet
The reform may allow crypto investment trusts, but that requires a separate amendment to the Investment Trusts Act enforcement order. No spot Bitcoin ETF is approved. The FSA stated in October 2025 that domestic crypto ETFs were barred under the previous framework; sponsors must clear product and listing reviews after implementing rules define the new route. That work hasn't started.
What comes next: the Cabinet Office must issue the enforcement order for the FIEA provisions. That order sets the tax timeline. Industry watchers expect the order within months, but the government hasn't signaled a preference for 2026 or 2027 enforcement. The unresolved question is whether the Finance Ministry will prioritize the 20% rate quickly or let the new compliance framework settle before flipping the tax switch.
