Japan Blockchain Association submits crypto tax reform request as firms express interest in the country
|- Japan Blockchain Association has submitted a crypto asset tax reform request to the government, seeking a Web3-friendly environment.
- The proposal seeks to eliminate income tax on profits when exchanging crypto assets.
- The move comes as crypto firms like Binance expressed interest in expanding to the country, constrained by tough US regulations.
The Japan Blockchain Association (JBA) has submitted a request to the country's Prime Minister, Fumio Kishida, who serves as Emperor and head of government, asking his administration to "revise the tax system regarding crypto assets and virtual currencies" at large.
Also Read: Crypto clampdown to intensify as US Senator Elizabeth Warren finds a new ally in Wall Street Banks.
Japan Blockchain Association pushes for crypto tax reforms
Led by Yuzo Kano, the Representative Director of bitFlyer Co., Ltd., who also serves as a representative director for the association, the JBA has petitioned the government to revise the tax system where crypto and digital assets are concerned.
The request proposes three reforms meant to bolster the country's position in the distributed Web 3 wave while at the same time fostering an environment where its citizenry "can own and use crypto assets." Citing the specific requests:
- Eliminate year-end unrealized gains taxation on tokens issued by third parties.
- Change the taxation method for individual crypto asset transactions to separate taxation and set the tax rate at a uniform rate of 20%, and
- Eliminate income tax on profits each time crypto assets are exchanged.
According to the document, eliminating year-end unrealized gains tax will encourage businesses to venture into the Web3 space. Citing an excerpt in the request form:
Under the current tax system, selling tokens for tax payment could cause the token's price to fall, thereby hindering the growth of token-enabled economies.
Accordingly, the association wants the taxation method revised to introduce a standard 20% rate, contrary to the current system where the taxation method imposes on individual crypto-asset transactions. Further, JBA wants income taxes imposed on crypto profits after a transaction to be eliminated.
Binance is looking for greener pastures in Japan
The move by the JBA comes as crypto firms show interest in other jurisdictions outside the US as the country's regulatory climate continues to heat up. Binance exchange, the largest crypto firm by trading volume, has already expressed interest in Japan, as reported, shoved by intense regulatory troubles. The interest followed assertions by Japan's prime minister, acknowledging the country's position as a Web3 hub and the potential for technological transformation.
Notably, Binance recently acquired a full stake in a regulated Japanese crypto platform, Sakura Exchange BitCoin (SEBC), as part of its long-standing plans to venture into Asia's upcoming crypto hub. Beginning August 1, the exchange will offer 30+ crypto assets as an initial feature, allowing users to migrate.
It is also worth mentioning that Bitcoin (BTC) trading in Japan continues growing, with the Japanese Yen (JPY) becoming overly volatile. This comes as inflation continues to rise in the country as the JPY depreciates and currently suffers one of the most severe exchange rate turbulence on record. It all started in March 2022 after the Federal Reserve began its aggressive interest rate hike campaign.
For details, please read Bitcoin trading in Japan rises as Yen turns volatile.
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