Japan Plans XRP Classification by Q2 2026

TLDR

• XRP could be reclassified under Japan's Financial Instruments Act.
• 80% of Japanese banks may adopt XRP by end of 2025.
• Japan plans to reduce crypto tax from 55% to 20% in 2026.

Japan is reportedly planning to classify XRP as a financial product by the second quarter of 2026. This move comes as part of broader efforts to integrate cryptocurrency into the country's financial system. However, there is currently no confirmation from primary sources such as Japan's Financial Services Agency (FSA) or Ripple that supports this timeline.

The classification would involve XRP being re-categorized under the Financial Instruments and Exchange Act (FIEA). This change is reportedly being led by Japan's FSA, with the reclassification affecting 105 different cryptoassets.

Goal of Cryptocurrency Integration by 2026

Finance Minister Satsuki Katayama has declared 2026 as Japan's "digital year." The initiative aims to promote regulated crypto adoption. As part of this effort, XRP could be positioned for inclusion in exchange-traded funds (ETFs), derivatives, and banking integrations.

SBI Holdings, through its subsidiaries like SBI Remit, is partnering with Ripple on XRP-based remittances. It is projected that 80% of Japanese banks could adopt XRP for cross-border payments by the end of 2025.

Potential Impacts on XRP and Related Assets

The reclassification could affect various aspects of XRP's use, including its payment utility, which is noted to offer a 70% cost reduction. Though specifics around other cryptoassets remain unclear, XRP's dominance in JPY fiat on-ramps suggests possibilities for increased trading volume.

No specific figures have been released about funding impacts or institutional involvement. Already, the reduction of Japan's tax rate on crypto income from 55% to 20% is planned for 2026, providing a future scenario for increased liquidity and bank participation.

Community and Regulatory Observations

The integration and reclassification plans appear centered on enhancing XRP's legitimacy. Currently, community reactions and additional regulatory updates from the U.S. SEC or Japan's FSA are not available in detail. Twitter client Xaif Crypto mentions the Q2 2026 timeline in a secondary source.

Information from broader social platforms or from the FSA is similarly absent, highlighting reliance on secondary reporting found on sites like Cryptoslate's Twitter.