[Japan Proposes Tax Reform for Separate Taxation and Loss Carryforward of Virtual Currencies] On December 19, Japan's Liberal Democratic Party and Japan Innovation Party released the 2026 fiscal year tax reform outline, proposing to classify virtual currencies as financial products that contribute to public asset accumulation. The proposal suggests applying a separate taxation system for virtual currency income, similar to that for stocks and investment trusts. The outline proposes treating spot trading, derivatives trading, and ETFs of virtual currencies as separate taxable items, allowing trading losses to be carried forward for three years. Financial products investing in virtual currencies are also included in the scope. Taxation details for NFT-related and reward-based transactions such as staking and lending remain unclear, and future transfers of virtual currency income overseas may be subject to taxation.