Survey Indicates Japanese Would Increase BTC Purchases with Government Crypto Tax Reforms

A majority of Japanese individuals indicated they would increase their purchases of Bitcoin (BTC), Ethereum (ETH), and altcoins if the government agrees to modify the country’s stringent crypto tax regulations.

This was the primary conclusion drawn from a survey of 1,500 adults carried out in April and commissioned by the Japan Blockchain Association (JBA).

JBA: Crypto Tax Reforms Could Boost Trading Volumes

Japan Blockchain Association (JBA) executives discuss their petition for tax reform at the headquarters of the crypto exchange bitFlyer on July 18, 2025. (Source: TV Tokyo Biz/YouTube/Screenshot)

However, their answers to the follow-up question were revealing. The question posed was: “Would you purchase crypto/more crypto if the government established a flat 20% tax rate on crypto profits?”

In response, 84% of the 191 individuals who reported holding crypto replied “yes.”

Additionally, 12% of the 1,309 individuals who do not currently hold crypto indicated they would begin buying coins if Tokyo approves tax reforms.

Japanese government bonds saw a rally on Friday, with yields declining across various maturities, ahead of Sunday’s closely monitored upper house election https://t.co/IimFxyWeMt

— Bloomberg (@business) July 18, 2025

Request for Capital Gains Tax Reform

The JBA proposed that the survey indicates tax reforms would significantly impact the trading volumes on domestic exchanges.

Currently, Japanese investors are required to report their crypto-related earnings on income tax returns under the “other income” category.

This means that depending on their tax brackets, crypto investors could face tax rates as high as 55% on their earnings.

In contrast, many other countries apply a capital gains tax to crypto. This means that after reaching a certain threshold, traders are taxed at a flat rate of typically 10-20%.

The Japanese Cabinet headquarters in Tokyo, Japan. (Source: Mytho88 [CC BY-SA 4.0])

Advocates for reform are urging Tokyo to approve a plan to eliminate crypto income tax laws, replacing them with a flat 20% capital gains tax.

The JBA endorses this proposal, as do several prominent members of the ruling Liberal Democratic Party, along with opposition lawmakers.

However, the regulatory Financial Services Agency (FSA) ultimately has the authority over all Japanese crypto policy.

So far, all recommendations from the FSA to the Cabinet have been codified into law.

The association stated: “Cryptoassets are evolving from a means of payment for the public to a means of asset accumulation.”

This aligns with the FSA’s plans to redefine crypto from a payment tool to an investment vehicle.

The industry body claims it is “intensifying its efforts” to persuade Tokyo to implement tax reform starting next year.

The JBA is an industry organization that includes some of the largest crypto exchanges and blockchain companies in the country.

JBA Submits Petition

The association also revealed on July 18 that it has submitted a petition to the FSA requesting approval for tax reform concerning crypto profits.

The survey was conducted on April 24 and April 25 of this year. Participants were all Japanese residents aged 20 to 69, with a demographic breakdown of 60% male and 40% female, and an average age of 38.

The JBA also posed additional questions. Notably, 75% of respondents expressed a preference for tax authorities to deduct their payable taxes at source, rather than requiring separate tax declarations.

The JBA has also requested that Tokyo allow crypto traders to choose their tax payment method: at source when selling coins, or after submitting declarations.

The authors of the survey also inquired why respondents who do not currently hold any coins have not yet invested.

In response, 8% indicated that they believed tax levels were too high, while 61% stated they felt they lacked adequate understanding of crypto.

The Japanese media outlet CoinPost reported that the FSA is currently “considering a proposal to transition cryptoassets to the framework of the Financial Instruments and Exchange Act.”

“If the transition is approved, cryptoassets will be officially classified as financial products,” the media outlet noted.

The majority of respondents indicated they are employed in the private sector. Students accounted for 5.3% of the respondent pool, and 213 unemployed individuals also provided responses.

As of this writing, ETH trading constitutes nearly half of the trading volume on bitFlyer, one of the largest crypto exchanges in the country.

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