The world’s third-largest economy is reclassifying crypto as a financial instrument and charting a path to slash punishing tax rates. The change reaches far beyond Japan, and most of the coverage is getting the details wrong.

On June 11, 2026, the lower house of Japan’s parliament passed a bill that begins one of the most consequential regulatory shifts in the country’s crypto history. The legislation reclassifies cryptocurrency from its current home under the Payment Services Act into the Financial Instruments and Exchange Act, the statute that governs stocks and bonds, and it sits alongside a closely linked tax proposal that would cut the tax on crypto gains from a punishing rate near 55% toward a flat 20%.