Japan Seeks Tax Filing Exemption for Trust-Based Stablecoins

Japan’s Financial Services Agency (FSA) is proposing to remove certain tax filing requirements for trust-based stablecoins as part of the country’s fiscal 2027 tax reform plans.

The proposal is aimed at making it easier for these digital assets to function as everyday payment instruments, particularly as stablecoin adoption grows in Japan.

Under Japan’s current rules, trustees can be required to submit tax-related documents whenever the beneficiary of a trust changes.

That creates a major administrative challenge for stablecoins because ownership can change every time a token is transferred from one person to another. Tracking every holder and reporting each change could become extremely difficult when the tokens are circulating among large numbers of users.

The FSA is therefore asking for an exemption from this specific reporting requirement for trust-based stablecoins. If the proposal is approved, trustees would no longer have to file beneficiary-by-beneficiary reports every time ownership of a qualifying trust-based stablecoin changes.

The measure is part of the FSA’s broader effort to promote financial innovation and create a regulatory framework that better reflects how stablecoins are actually used. The proposed changes could take effect from April 1, 2027, at the start of Japan’s new fiscal year, subject to approval through the country’s tax reform process.

Japan has been gradually building a regulatory framework for stablecoins, including yen-denominated tokens designed to be used for payments and settlement.

The latest proposal could reduce compliance costs for issuers and make trust-based stablecoins more practical for everyday transactions. One example is JPYSC, a yen-denominated stablecoin issued through SBI Shinsei Trust Bank.

The proposal comes as Japan continues to position itself as a major digital-asset market while tightening and clarifying the rules surrounding cryptocurrencies and stablecoins.

Rather than treating stablecoins purely as speculative assets, regulators are increasingly looking at their potential role in payments, settlements and financial infrastructure.

If approved, the tax reporting exemption could make it easier for trust-based stablecoins to move through Japan’s financial system—and could further accelerate the country’s push toward digital payments.