Key takeaways
- Japan’s review of crypto regulations could lead to the introduction of crypto ETFs.
- Reclassification under investment law can reduce taxes on digital assets.
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Japan’s financial regulator plans to review crypto regulations, which could lead to lower taxes and lower domestic crypto ETFs.
The Financial Services Agency (FSA) will assess whether regulating crypto under the Payments Act is still appropriate, given that tokens are now used more for investment than payments. This review could result in cryptocurrencies being reclassified as financial instruments under Japanese investment law.
Such a change would strengthen investor protections and could lead to “dramatic changes,” according to Yuya Hasegawa, an analyst at Bitbank Inc. It could strengthen efforts to reduce taxes on cryptocurrencies from 55% to 20%, aligning with taxes on cryptocurrencies. actions. This change could also pave the way for the launch of crypto ETFs, which are currently banned in Japan.
The FSA official declined to elaborate on potential outcomes, saying the review could continue through the winter without predetermined conclusions. Japanese crypto officials have long advocated for less stringent regulations to reduce costs and spur growth, viewing the current rules as too restrictive. Recently, Japan’s central bank kept interest rates steady at 0.25% after core inflation rates were posted at 2.8%.
This regulatory reassessment comes as Japanese companies like Sony explore blockchain technology and major banks consider issuing stablecoins under recently implemented laws. Trading volumes on Japanese crypto exchanges are recovering, approaching $10 billion per month, up from $6.2 billion in 2023, according to CCData.
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