Japan’s Finance Minister Katsunobu Kato has publicly acknowledged that cryptocurrencies should be considered as part of diversified investment portfolios. Speaking at Web3 Conference WebX 2025 in Tokyo, Kato said crypto could be a legitimate asset class if proper rules are in place. “While crypto assets carry the risk of high volatility, by establishing a proper investment environment, they can become an option for diversified investment,” Kato told attendees. He emphasized that Japan will focus on building a sound trading environment for digital assets as adoption expands. The remarks marked one of the most direct endorsements of crypto by a sitting Japanese finance minister. Push for Tax Reform Kato’s comments follow renewed calls from Japan’s Financial Services Agency (FSA) to overhaul crypto taxation rules. Currently, crypto gains fall under “miscellaneous income” and are taxed at rates ranging from 15% to 56% depending on the income bracket. The FSA has asked the government to reclassify crypto gains under a flat tax system similar to stocks, with a rate of around 20.315%. Officials argue that this change would streamline tax reporting while encouraging wider adoption of cryptocurrencies within Japan’s financial system. The proposal reflects Japan’s gradual shift toward a more crypto-friendly regulatory stance. Growing Institutional Involvement The momentum has also been reflected in corporate activity. Bitcoin treasury firm Metaplanet has been upgraded from small-cap to mid-cap status under FTSE Russell’s Semi-Annual Review. The adjustment means Metaplanet is now included in the FTSE Japan Index, boosting its visibility among investors. At the same time, major Japanese financial groups are embracing blockchain partnerships. SBI Group has announced new collaborations with Circle, Ripple, and Web3 developer Startale. It also recently partnered with Chainlink to roll out crypto tools aimed at financial institutions across Asia. Such moves point to a growing recognition of blockchain as a key driver in the country’s financial innovation. Stablecoins on the Horizon Japan’s regulatory framework is also preparing for the introduction of yen-backed stablecoins. Reports suggest that the FSA could approve their issuance as early as this fall. The development would mark a significant milestone in Japan’s digital asset strategy, allowing consumers and businesses to transact with blockchain-based tokens tied to the national currency. Together, Kato’s remarks, proposed tax changes, and institutional adoption signal that Japan is positioning itself as a global hub for regulated crypto activity.
