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Japan’s Finance Minister Katsunobu Kato has acknowledged that cryptocurrencies deserve a place in diversified investment portfolios. Speaking at the Web3 Conference WebX 2025 in Tokyo, Kato said that while digital assets carry volatility risks, a proper investment framework can make them a viable option for diversification. He also emphasized the government’s focus on building a sound trading environment to support Japan’s growing base of crypto users.
His remarks come as Japan’s Financial Services Agency (FSA) pushes for a major tax reform on crypto assets. Currently, crypto gains are taxed as miscellaneous income at rates ranging from 15% to 56%, depending on income brackets. The FSA has urged the government to reclassify crypto gains for separate taxation, similar to stocks, with a flat rate of about 20.315%.
The move highlights Japan’s shifting stance toward embracing cryptocurrencies as part of its financial ecosystem. With increasing adoption, regulators are aiming to balance investor protection while encouraging crypto’s role in the broader economy.
