Japan's Finance Minister Katsunobu Kato stated the possibility of including cryptocurrencies in diversified investment portfolios, highlighting the need for innovative conditions for their growth.
Finance Minister's Statements on Cryptocurrencies
Katsunobu Kato remarked that "crypto assets carry the risk of high volatility, but by creating a proper investment environment, they can be one of the options for diversified investment." His comments were made at the WebX 2025 conference in Tokyo, where the minister emphasized the government's desire to foster innovation without imposing excessive restrictions.
Japan's Financial Situation and Its Impact
Japan is facing issues with a debt-to-GDP ratio exceeding 200%, raising concerns about future financial stability and potential yen depreciation. Current economic conditions, such as low or negative real interest rates along with high inflation, may lead to increased interest in alternative assets like cryptocurrencies. According to IMF data, this ratio is about 255% in 2024, making Japan the leader among developed nations in terms of debt.
Development of the Cryptocurrency Market in Japan
Japan's Financial Services Agency (FSA) recently urged the government to revise cryptocurrency taxation. Currently, gains from crypto are taxed as miscellaneous income with rates ranging from 15% to 56%. The FSA proposed reclassifying them under a flat tax system similar to stock taxation, with a rate around 20.315%. This change could lead to increased trading activity domestically, while many investors currently move to offshore platforms. Additionally, approval for yen-backed stablecoin issuance by the FSA is expected this fall.
These initiatives and regulatory changes regarding cryptocurrencies in Japan underscore the growing interest in the sector. The Finance Minister emphasizes the potential integration of crypto assets into investment portfolios, which could impact the financial market in the country.
