Japan’s finance minister supports cryptocurrencies as portfolio diversifiers

Japan’s finance minister, Katsunobu Kato, stated that cryptocurrencies merit inclusion in investment portfolios, while emphasizing the government’s commitment to establishing a secure and transparent trading environment for the sector.

Kato highlighted the role of cryptocurrencies in diversified portfolios during his keynote address at the Web3 WebX 2025 Conference in Tokyo, according to a Bloomberg Japan report published Monday.

“Although crypto assets are subject to significant volatility, with the right investment framework they can serve as a viable option for portfolio diversification,” Kato remarked.

He further noted that, given the expanding user base, his focus will be on fostering a strong and reliable trading environment for digital assets.

Japan strengthens its crypto-friendly stance

The announcement coincides with a request from Japan’s Financial Services Agency (FSA) urging the government to revise the taxation of cryptocurrencies by introducing a flat rate. Currently, cryptocurrency earnings fall under miscellaneous income, with tax rates ranging between 15% and 56% depending on the income bracket.

The FSA proposed reclassifying cryptocurrencies under separate taxation, aligning them with equities, which would result in gains being taxed at a uniform rate of approximately 20.315%. The move underscores the growing relevance of digital assets in Japan’s economy.

Japan doubles down on its crypto ambitions

Also on Monday, reports confirmed that local Bitcoin treasury firm Metaplanet has been upgraded from a small-cap to a mid-cap stock in FTSE Russell’s September 2025 Semi-Annual Review. The change qualifies the company for inclusion in the benchmark FTSE Japan Index.

The development follows a series of blockchain-related initiatives by Japan’s financial sector. Recently, financial conglomerate SBI Group partnered with blockchain oracle provider Chainlink (LINK) to deliver cryptocurrency tools for financial institutions across Asia.

In addition, SBI entered into new blockchain collaborations this month with Circle, issuer of USD Coin (USDC), Ripple, developer of XRP, and Web3 company Startale. Reports also suggest that the FSA is preparing to authorize the launch of yen-denominated stablecoins as early as this autumn.