Japan is reportedly considering whether to loosen its rules for the crypto industry.
This consideration is being driven in part by a growing number of Japanese firms that are exploring blockchain-related initiatives, Bloomberg reported Tuesday (Sept. 17).
Prime Minister Fumio Kishida has prioritized Web3, but his tenure is nearing an end, and it is not known if any of those who aim to succeed him favor regulatory adjustments in this field, according to the report.
Under Kishida, regulators made it easier to list digital tokens at crypto exchanges, per the report. Japan also unveiled stablecoin rules and developed a framework for crypto exchanges that focuses on protecting investors.
The country’s licensing rules can be challenging, making it difficult to start new businesses in this space, but its regulatory posture also led to benefits like the Japanese subsidiary of FTX being the first to resume customer withdrawals after the crypto exchange declared bankruptcy, according to the report.
One thing the crypto industry would like to see changed is the tax on gains from crypto, which can be as high as 55%, while that for traditional investments is generally 20%, the report said.
The Japanese firms exploring blockchain-related initiatives include Sony, Nippon Telegraph and Telephone, Toyota Motor and Mitsubishi UFJ Financial Group, which is the country’s biggest bank, per the report.
Sony launched a digital ledger called Soneium, while Mitsubishi UFJ Financial Group is considering issuing stablecoins, according to the report.
On Monday (Sept. 16), Sony Block Solutions Lab and stablecoin issuer Circle launched a collaboration designed to “drive innovation and creativity through decentralized technologies” on the Soneium blockchain ecosystem.
“By integrating Circle’s financial infrastructure with Soneium, we are set to redefine the landscape of digital entertainment and finance,” Jun Watanabe, chairman of Sony Block Solutions Lab, said in a press release announcing the partnership.
When Japan passed a bill in June 2022 outlining a legal fabric for stablecoins, it became one of the first major economies to do so. The proposed legislation stated that stablecoins must be linked to the yen or another legal tender and guarantee that holders can redeem them at face value. It also indicated that stablecoins can only be issued by licensed banks, registered money transfer agents and trust companies.
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