The Financial Services Agency of Japan plans to classify cryptocurrencies as financial assets, marking a significant advancement in the country's regulatory and tax policies regarding cryptocurrencies, and is expected to promote market legitimization and enhance investor confidence. (Background: The yen depreciated below 158, hitting a 5-month low, the Bank of Japan hinted that the conditions for interest rate hikes are maturing, experts warn that significant events may occur in January.) (Additional context: Will Japan build Bitcoin reserves? Prime Minister Shigeru Ishiba: Currently lacking sufficient information, safety and liquidity are the primary considerations) The Financial Services Agency of Japan recently announced plans to change the legal classification of cryptocurrencies, viewing crypto assets like Bitcoin as 'financial assets.' This could not only impact tax policies but also have far-reaching effects on the legitimization of the crypto industry and investment regulations. Official documents indicate that the agency has stated its position in the 2025 tax reform request, hoping to begin viewing crypto assets as 'financial assets that the general public can invest in.' Transition from Payment Tools to Investment Assets Currently, Japanese law (Payment Services Act) classifies crypto assets as 'payment tools,' primarily used for transactional payments. However, the Financial Services Agency proposed in the 2025 tax reform request to change the definition of crypto assets, viewing them as 'financial assets that the general public can invest in.' This change means that cryptocurrencies like Bitcoin will increasingly be seen as investment tools similar to stocks or funds, rather than merely as payment methods. Such a change not only grants cryptocurrencies greater market legitimacy but also helps enhance their status as investment products, allowing more investors to enter the crypto investment space. Tax Reform Still Unclear Although the agency's documents did not directly mention tax reforms for cryptocurrencies, Japanese crypto media CoinPost pointed out that this indicates the current cryptocurrency tax rules may be reconsidered. For a long time, the crypto industry has criticized Japan's high tax rate policies, especially the heavy tax burden on transaction profits, making the Japanese market less attractive to crypto companies. Future adjustments to the tax system may improve Japan's competitiveness in the international crypto market. Support from the Liberal Democratic Party Prior to this, Japan's ruling Liberal Democratic Party (LDP) also proposed similar claims in its 2025 tax policy recommendations. The LDP hopes to include cryptocurrencies in 'accountability and investor protection regulations' and reference the management methods of traditional financial products like stocks. This means that certain crypto assets will be regarded as common 'financial products' in 'public investment portfolios,' further consolidating their position as mainstream investment targets. Related Reports The yen depreciated below 158, hitting a 5-month low, the Bank of Japan hinted that the conditions for interest rate hikes are maturing, experts warn that significant events may occur in January. Will Japan build Bitcoin reserves? Prime Minister Shigeru Ishiba: Currently lacking sufficient information, safety and liquidity are the primary considerations. Minutes from the Bank of Japan meeting: Interest rates may gradually rise to 1% by 2025 if inflation meets expectations, the yen depreciates below 157. "The Financial Services Agency plans: To view cryptocurrencies as investment assets, transitioning from payment tools to 'financial products'." This article was first published on BlockTempo (BlockTempo - the most influential blockchain news media).