Japan eyes crypto rule changes that could lower taxes, allow ETFs
Japan's crypto regulation review could redefine investor protections and tax strategies.
Key Takeaways
- Japan's review of crypto regulations could lead to the introduction of crypto ETFs.
- Reclassification under investment law may reduce taxes on digital assets.
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Japan’s financial regulator plans to review crypto regulations, potentially leading to lower taxes and domestic crypto ETFs.
The Financial Services Agency (FSA) will assess whether regulating crypto under the payments act is still appropriate, given tokens are now used more for investing than payments. This review could result in reclassifying crypto as financial instruments under Japan’s investment law.
Such a change would strengthen investor protections and potentially lead to “dramatic changes,” according to Yuya Hasegawa, an analyst at crypto exchange Bitbank Inc. It could bolster efforts to reduce crypto taxes from up to 55% to 20%, aligning with taxes on stocks. The shift may also pave the way for launching crypto ETFs, currently banned in Japan.
The FSA official declined to specify potential outcomes, stating the review may continue through winter with no predetermined conclusions. Japan’s crypto executives have long advocated for less stringent regulations to reduce costs and drive growth, viewing current rules as overly restrictive. Recently, Japan’s central bank maintained interest rates stable at 0.25% after core inflation rates were shown at 2.8%.
This regulatory reassessment comes as Japanese businesses like Sony explore blockchain technology, and major banks consider issuing stablecoins under recently implemented laws. Trading volumes at Japanese crypto exchanges are recovering, nearing $10 billion monthly, up from $6.2 billion in 2023, according to CCData.
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