By George Ward
According to reports, Japan recently announced its plan to review its 30% tax mandate on investors holding crypto assets. In addition, the government is encouraging crypto adoption to aid local finance and technology growth.
Japan Relaxes Crypto Rules
A few months ago, in the wake of the rapid adoption of crypto technology, the Japanese government issued a 30% tax on all crypto assets investors hold in their portfolios. This tax is applicable even if investors have not made any profits yet.
Hence, many investors refrained from trading on local exchanges to avoid the harsh tax policy and opted for foreign exchanges. In addition, many crypto startups started avoiding the region, pitching their operation offshore because of this harsh tax policy that discourages investors from patronizing them.
However, to encourage crypto activities in the region again, the Japanese government is set to ease these stringent tax laws. According to reports, the Liberal Democratic Party (LDP), the country’s ruling party, set up a tax panel to review some crypto tax laws on December 15.
The board reportedly removed the preexisting rule that required crypto firms to pay taxes on profits they made from issuing or holding crypto tokens. In addition, the reports revealed that a more friendly crypto tax policy would be presented to the parliament by January.
Once the parliament approves it, the new policy will take effect by April 1. Akihisa Shiozaki, an LDP policymaker, stated that the new development by the authorities is a huge leap forward. She added that it would encourage many crypto firms to start offering crypto services, especially custodian and trading services in the region.
Japan Keen On Expanding Crypto Adoption
Despite the FTX crash, the country has taken several steps toward developing crypto services and products in the region. Recently, Fumio Kishida, the Japanese prime minister, relayed his belief that NFTs and other crypto-related technology are pivotal to the country’s transformation.
He buttressed his point by citing the digitalization of their national identity cards. In addition, the authority that monitors crypto asset exchanges in the country announced that it would review some strict regulations on the crypto industry.
For instance, the association planned to ease the stringent procedures it used in screening tokens before they were listed on exchanges. Furthermore, SMBC, a giant banking firm in Japan, revealed that it is currently exploring the utility cases of outbound tokens (SBT).
Ethereum co-founder Vitalik Buterin proposed the SBT project, where tokens would be used to represent people’s virtual identities. As a result, the government geared these and many more activities toward boosting crypto adoption in the country.