On August 28, 2024, Japan’s Minister of Economy, Trade and Industry, Takeru Saito, announced the country’s plans to boost its Web3 ecosystem through tax reforms designed to support startups.
Startup-Friendly Tax Reforms Vital for Web3 Growth
Japan is considering implementing tax reforms specifically aimed at startups to encourage growth in the Web3 industry. Speaking at the WebX Conference, Saito highlighted the significant potential of Japan’s Web3 and blockchain enterprises. He emphasized the need for favorable tax policies to create an ecosystem that would attract global businesses and developers to Japan. Japanese Prime Minister Fumio Kishida also shared these views.
In a video address during the WebX 2024 opening ceremony, Kishida noted that Web3 and blockchain businesses could be instrumental in addressing many of Japan’s societal challenges. With appropriate tax and legal reforms, Web3 startups could more easily secure funding and create new employment opportunities in the country.
In July 2023, the Japan Blockchain Association (JBA) had already urged Japanese authorities to reduce taxes on crypto assets. Kishida further stated that the government would work to foster an environment that promotes the use of Web3 tokens, blockchain-powered instant payments and revitalizes the content industry. Future Web3 policies will prioritize user protection.
Signs of a shift toward a more crypto-friendly stance were evident in September 2023 when the Japanese government introduced measures allowing startups to receive investments in cryptocurrency.
Read more: SEC Wells Notice to OpenSea Sparks Reactions from Crypto Leaders and Politicians
Regulatory Challenges Persist in Japan
Despite the positive outlook at the WebX Conference, regulatory challenges continue to impact Japan’s crypto ecosystem. For example, in July 2024, leading crypto exchange Gate.io ceased operations in Japan, citing the need to comply with financial regulations, likely due to Japan’s stringent rules addressing money laundering and terrorism financing.
Japan’s strict cryptocurrency regulations have some justification. In May 2024, DMM Bitcoin, a major Japan-based cryptocurrency exchange, was hacked, resulting in a loss of $305 million in Bitcoin (BTC).
On the other hand, institutional interest in Bitcoin in Japan appears to be growing. A June 2024 survey conducted by Nomura Holdings and Laser Digital Holdings revealed that 54% of the 547 surveyed investment managers from family offices and public interest corporations expressed interest in entering the digital assets market within the next three years.
Cre: bitcoinist
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
Email: [email protected]
