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Japan is supporting the crypto industry from the unexpected fallout of Sam Bankman-Fried’s crypto empire. As the country agreed to ease corporate tax rules for virtual currencies.
Japan’s Relief for Crypto Industry
According to the Bloomberg report, on Dec. 15, 2022, the Liberal Democratic Party’s tax committee approved a proposal to exempt companies from paying tax for paper gains on crypto coins that they hold after issuing them, according to a party politician.
The proposal aims to improve business conditions for companies issuing cryptocurrencies, as the party politician stated. At present the country imposes a tax of around 30% on companies sitting on unrealized gains from cryptocurrency holdings.
Before the end of this year, the administration of the Japanese Prime Minister, Fumio Kishida may finalize their annual tax policy guidelines. Although, the tax code amendments generally submitted to the parliament in January.
It must be noted that Mr. Kishida who became Prime Minister in September 2021, has been a supporter of digital finance and blockchain adoption. Recently, he announced further investments in the non-fungible token (NFT) along with the metaverse industry. And also included crypto in plans to modernize the economy, under his “new capitalism” mandate.
Additionally, the tax legislation shows the authorities are following the previously announced plans to cut some of the bureaucracy in the crypto industry to boost innovation and investment. Amid the recent fallout of the FTX, which had an operation in Japan.
The Lawmaker Statement
The Japanese lawmaker urged on more clarity of cryptocurrency regulation. As a crypto watchdog did not tell the consumers about the potential red-flags around the native coin of FTX that got the approval for a local listing this year.
Akihisa Shiozaki, a lawmaker with the ruling Liberal Democratic Party, said in an interview that “It will become more and more important to ensure transparency for consumers when there are any matters that require attention to tokens.”
Still, the fallout of FTX may not affect Japan to reverse course in relaxing coin-listing rules, as Mr. Shiozaki states, who helped to design the nation’s crypto policy. He pointed out that providing consumers such details is important for Japan to “maintain trust in a token economy.”
In October, Japan’s Virtual and Crypto asset Exchange Association (JVCEA) announced that it would relax its screening procedure for crypto token listings. The JVCEA is the self-regulatory body that keeps an eye on local crypto exchanges. It has reported to the Financial Services Agency when it authorized FTT’s listing under some conditions, an official at the country’s financial regulator said.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
