The cryptocurrency market is still reeling from the fallout from FTX and needs something to give it the boost it so desperately needs. Japan is one nation that has undertaken the task to liberalize the industry. The country’s latest effort is to make it easier for cryptocurrency exchanges to list tokens without having to go through a rigorous pre-screening process.
Japan has taken an active effort to liberalize the crypto industry after the epic failure of Sam Bankman-Fried and his digital empire. According to reports by Bloomberg News, Japan will make it easier for crypto exchanges to list tokens. The body that governs cryptocurrency exchanges informed its member companies of a new rule, which takes effect immediately, allowing them to list coins without having to go through the lengthy pre-screening process unless a token is new to the Japanese market.
Japan Relaxes Onerous Crypto Rules
Under Prime Minister Fumio Kishida’s administration, Japan is relaxing some of its burdensome crypto rules even as the contagion from the fall of FTX continues to spread throughout the digital industry.
Japan’s ruling Liberal Democratic Party (LDP) recently approved a proposal that would exempt companies issuing cryptocurrencies from taxes on unrealized capital gains for tokens they retain on their books. Japan’s current policy dictates that Japanese token issuers are required to pay a set 30% corporate tax on their holdings, regardless of whether they have realized a profit through the sale or not. This current harsh tax policy has forced many domestically established crypto and blockchain firms to set up operations elsewhere. The proposed amendments sims to improve business conditions for companies issuing cryptocurrencies in Japan.
In further a further attempt to help the industry, the Japanese Financial Services Agency (FSA) announced that it is reconsidering major cryptocurrency restrictions related to the distribution of foreign issues stablecoins in 2023. Reports indicate that new stablecoin regulations in Japan will allow local exchanges to handle stablecoin trading. As it stands, no local exchanges in Japan are permitted to provide trading in stablecoins such as USDT and USDC.
Japan’s Prime Minister has been a vocal advocate of digital assets and blockchain adoption. He recently announced additional investment in the NFT and metaverse industry and said that NFTs, blockchain, and the metaverse will play a vital role in Japan’s digital transformation. He used the digitization of national identity cards as an example of this transformation.
Kraken Suspends Operations in Japan
Despite Japan’s recent efforts to make it a space for cryptocurrencies to thrive, crypto exchange Kraken, announced on December 28, that it had decided to close its operations in the country and deregister from the FSA effective January 31, 2023. The exchange explained that current market conditions in Japan, combined with a weak global market, forced it to reconsider its investment in Japan, and as a result, would suspend its operations in the country.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
