The ruling party in Japan proposes to lower the upper limit of the cryptocurrency tax rate to 20% for benchmark stock investments

According to The Block, the Liberal Democratic Party (LDP) in Japan has drafted a proposal for cryptocurrency tax reform, proposing to lower the cryptocurrency tax rate from a maximum of 55% to 20% and reclassify it as a financial product, subject to the Financial Commodity Exchange Act, similar to the tax model for securities investments. Currently, Japan considers cryptocurrency earnings as "miscellaneous income" with a maximum tax rate of 55%. If the proposal is approved, cryptocurrency assets may receive independent tax treatment and lay the foundation for spot cryptocurrency ETFs. The Liberal Democratic Party is soliciting public opinions until March 31st, after which it will be submitted to the Financial Services Agency (FSA) for review. The FSA previously announced that it will announce new directions for cryptocurrency regulation no later than June.