In a bid to promote its thriving blockchain and crypto sector, Japan has revised its laws, granting cryptocurrency issuers an exemption from the 30% corporate tax on unrealized gains on tokens. The National Tax Agency made this significant change on June 20, signaling the government’s support for digital finance and the adoption of blockchain technology.
Prime Minister Fumio Kishida, an advocate for what he terms “new capitalism,” believes that embracing digital finance and blockchain will revitalize Japan’s economy. As part of his vision, he aims to create a favorable environment for businesses in the cryptocurrency sector.
While this tax relief is a positive step for cryptocurrency issuers, individual investors are not exempt from taxation. Crypto-related earnings exceeding 200,000 Japanese yen (US$1,400) are still subject to a maximum 55% income tax, classified as “miscellaneous income.”
Recognizing the growing influence of the crypto industry, the Japan Virtual & Crypto Assets Exchange Association, the country’s prominent crypto lobby group, is actively requesting regulators to relax the limits on crypto margin trading. Bloomberg reported this development last week, shedding light on the industry’s efforts to foster innovation and expand opportunities.
Furthermore, Mitsubishi UFJ Financial Group Inc. (MUFG), Japan’s largest bank, is engaging in discussions with various global cryptocurrency companies to explore the issuance of stablecoins. This move demonstrates MUFG’s keen interest in the potential of digital assets and its commitment to staying at the forefront of technological advancements.
Earlier this month, MUFG unveiled the details of its Progmat Coin blockchain-based platform, aimed at enabling local banks to launch stablecoins and digital assets. The introduction of this platform signifies a significant step forward in integrating traditional financial institutions with the rapidly evolving world of cryptocurrencies.
As Japan paves the way for increased adoption of blockchain and digital assets, the country’s efforts to create a favorable ecosystem for the crypto sector are becoming increasingly apparent. By relaxing taxes for cryptocurrency issuers, encouraging innovation in margin trading, and collaborating with global industry players, Japan is poised to solidify its position as a leading hub for digital finance and blockchain technology.
The revised tax laws, the lobby group’s requests, and MUFG’s exploratory talks indicate Japan’s commitment to fostering a dynamic and prosperous crypto ecosystem. The government’s proactive stance is set to attract further investment and talent, propelling the nation’s economy into the realm of new possibilities.
