Japan Exempts Trust-Based Stablecoins from Tax Filing Requirements

Japan's Financial Services Agency (FSA) is seeking to exempt trust-based stablecoins from tax filing requirements each time a beneficiary changes during circulation, according to a recent proposal.

The move follows the FSA's lifting of the 1 million yen ($6,700) limit on stablecoin transactions, expanding use cases beyond retail payments. The agency has requested that the government exempt trust-based stablecoins from tax filing requirements as part of its 2027 tax reform proposal.

This exemption would ease tax reporting burdens tied to trust-based stablecoin, making it easier for trustees to manage changes in holders without needing to file beneficiary statements each time a change occurs. The current tax law requires trustees to file these statements whenever beneficiaries change, but the continuous circulation of stablecoins as payment instruments makes this challenging.

The FSA's proposal is seen as a major step forward for Japan's stablecoin market and digital asset adoption, building on previous reforms that classified digital assets as financial products and reduced the maximum tax rate to 20%. The agency also lifted the transaction limit on stablecoins and launched a Crypto Assets and Stablecoins Division amid easing regulations.

SBI's JPYSC and Ripple's RLUSD are among the trust-based stablecoins expected to benefit from this exemption, as they are issued with the help of SBI VC Trade. The FSA has also asked for similar tax treatment for foreign-issued trust-based stablecoins that already qualify as electronic payment instruments.