Japanese Lawmakers Call for Different Ways of Handling Crypto. The ruling Liberal Democratic Party (LDP) in Japan has important members calling for a new definition of cryptocurrency and how it is regulated, which could mean that more changes are on the way in Tokyo.
CoinPost, a Japanese news outlet, said that two senior members of the LDP made these comments: Seiji Kihara, leader of the party’s blockchain promotion unit, and Masaaki Taira, head of the Web3 adoption team.
The necessity to redefine crypto
Both Kihara and Taira stressed the need for redefining legal concepts about cryptocurrencies like Bitcoin (BTC). According to Kihara, this is because tokens in Japan are currently classified as alternative names for “money” or “currency.” These same tokens, however, are assets within investment products. He believes this discrepancy must be dealt with.
Taira had similar views as what Kihara expressed, only that he likened cryptos to gold. He added that there was a need for alignment in the relevant language concerning this role. If clearly defined, will these terms enable banks, including financial institutions managing securities, among others, to play a normal role in cryptocurrencies?
Present regulatory environment
Likewise, Taira highlighted the fragmented regulatory climate surrounding Japanese crypto exchanges and securities firms, which are currently subject to different laws. Even the taxation system differs accordingly. Taira described how these entities were treated differently by Japanese tax authorities, meaning much confusion exists between businesses certified by them and investors alike.
Calls for further crypto reforms
Japan’s overly strict crypto tax regulation has forced many startups in blockchain technology out of its jurisdiction. Consequently, Japan has agreed to revise corporate tax policies on virtual currencies after being criticized about such issues. In addition to this critique, though, there have not been any concrete steps aimed at changing personal income taxes applicable to individuals trading cryptocurrency today. As a result, crypto traders are burdened with tax obligations that can reach up to 55% of their profits under the current rules.
The LDP, Japan’s ruling party since 1965, made its intention earlier this year to amend its personal crypto tax law. In the April white paper by the LDP, crypto-related tax reforms were described as an issue requiring immediate attention.
Future directions and potential developments
Masaaki Taira has proposed the creation of a “minister of web3” for faster blockchain development in Japan. This suggestion reinforces LDP’s determination to create a better atmosphere towards cryptocurrency and blockchain technologies.
Seiji Kihara and Masaaki Taira’s plea for redefining crypto terms is consistent with other moves aimed at modernizing how Japan deals with digital assets while trying to solve issues associated with cryptocurrency regulation in the country, as per our sources. Such changes may have considerable implications on the perception and treatment of cryptocurrencies in Japan and globally if materialized, leading to possible new global benchmarking standards on cryptos regulations.
