Japanese regulators are planning to classify cryptocurrencies as financial products under the Financial Instruments and Exchange Act and introduce a tax overhaul for the sector. This move would bring cryptocurrencies under investor protection rules, fairer taxation, and stricter market conduct standards. The proposal aims to implement a flat 20% capital gains tax rate for cryptocurrencies in line with traditional financial instruments. Additionally, regulators are focusing on preventing insider trading and considering allowing banks to acquire and hold cryptocurrencies under strict risk management conditions.

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