A Web3 project team in Japan proposes crypto-friendly policies to foster digital currency growth and establish a welcoming environment.
The governing Liberal Democratic Party’s Web3 project team in Japan has unveiled a white paper detailing strategies to broaden the nation’s digital currency sector and establish an accommodating environment for cryptocurrencies. These suggestions were part of the national strategy of Prime Minister Fumio Kishida’s administration.
Instead of adhering to conventional bureaucratic methods, the Web3 project team intends to generate regulatory proposals that cover a wide range of areas, from nonfungible tokens (NFTs) to decentralized autonomous organizations (DAOs). As various governments concentrate on implementing consumer protection regulations, Japan is striving to nurture a more hospitable climate for digital currencies. This approach aims to address the issue of companies relocating to jurisdictions with lower tax burdens.
The white paper highlights the importance of Japan showcasing leadership during this year’s G7 summit, where discussions on cryptocurrency matters will take place. The country should focus on leveraging the potential benefits of Web3 while advocating for technology-agnostic and morally responsible innovation.
Proposed Tax and Regulatory Reforms to Boost Crypto Development
The document also suggests several alterations to tax rules, acknowledging the notable exemption already granted to token issuers. It proposes tax relief for firms holding tokens issued by other organizations, provided these tokens are not intended for short-term transactions. It encourages self-assessments, permitting investors to offset losses for up to three years and tax digital currencies only upon conversion into fiat currency.
One of the primary concerns raised in the white paper is the absence of accounting standards, which has made it challenging for Web3 enterprises to secure auditors. The paper advises that government ministries and agencies cooperate with the Japanese Institute of Certified Public Accountants to establish guidelines. Furthermore, it recommends the introduction of a DAO law, inspired by Japan’s godo kaisha, a legal structure akin to a limited liability company. It also suggests revisions to the Companies Act and the Financial Instruments and Exchange Act.
While the verification process for tokens already in circulation has been streamlined, the examination of new tokens introduced by foreign entities remains time-consuming. The white paper advocates for increased transparency in procedures, enabling issuers to supply crucial information for evaluation.
Last year, Japan adopted a regulatory framework for stablecoins. The latest white paper emphasizes the significance of preparing the landscape for stablecoin registration and founding a self-regulatory organization. It also suggests devising plans for yen-backed stablecoin initiatives.
With the support of the national strategy and a dedication to cultivating a welcoming environment for cryptocurrencies, Japan may soon emerge as a hotspot for the rapidly expanding world of digital currencies and Web3 implementations.
1 million tech jobs are at risk of going overseas. As the U.S. goes down a path of regulatory uncertainty, the EU, UK, UAE, Hong Kong, Singapore, Australia, and Japan are all creating environments for crypto to flourish so that they can capitalize on the next wave of innovation. pic.twitter.com/2UMkFxajcM
— Coinbase 🛡️ (@coinbase) March 29, 2023
