Japan declares 2026 a ‘digital year’ and puts crypto at the center

The Japanese government is taking a clear step towards digital innovation. In her New Year’s message to the financial sector, the Minister of Finance emphasized the growing importance of stock exchanges in a changing economy. Crypto must also be given a full place in this.

Japan positions crypto at the center of financial policy

Japan is consciously focusing on crypto as part of the regular financial system. The country wants to stimulate innovation, investments and economic growth. This is evident from a speech by Finance Minister Satsuki Katayama during the New Year’s ceremony at the Tokyo Stock Exchange.

Katayama emphasized that stock and commodity exchanges play a “critical” role in making digital assets accessible to the general public. According to her, these platforms can act as infrastructure for the spread of blockchain technology.

She declared 2026 “the digital year”, in which innovative forms of commerce, fintech and regulated crypto infrastructure are actively supported.

Katayama praises success of US crypto ETFs

The minister explicitly referred to the rise of crypto exchange-traded funds (ETFs) in the United States. According to her, these funds demonstrate how regulated products make digital assets accessible to ordinary investors.

A striking example is BlackRock’s Bitcoin (BTC) exchange fund, called IBIT. This fund grew to $80 billion in assets under management in 374 days, becoming the most successful ETF launch ever. By comparison: the IEFA fund, which invests in international shares, took more than five years to achieve this.

Major reforms should make Japan a crypto hub

Japan is now working on deep reforms. For example, 105 major cryptocurrencies are being reclassified as financial products. Cryptocurrencies will then fall under existing financial laws, which ensures greater protection for investors and clearer rules for companies.

The government is also considering reducing the tax on crypto from a maximum of 55 percent to 20 percent. In addition, new rules that allow banks to store and trade crypto assets are being considered.

With these measures, Japan wants to profile itself as a global crypto hub. At the same time, the country hopes to tackle its long-standing economic challenges, such as deflation and low productivity growth.

India dethrones Japan

Japan’s weak economic performance recently led to a striking shift on the world stage. India is now officially the fourth largest economy in the world, having overtaken Japan. Germany, the current number three, is the next target.

India is currently combining strong economic growth with low inflation, a situation that economists refer to as a ‘Goldilocks moment’. Yet prosperity per capita remains low, partly due to the enormous population of almost 1.5 billion.

By comparison, Japan has only 125 million inhabitants. The major challenge for India is therefore to translate this impressive economic growth into broader, inclusive prosperity.