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Japan’s Financial Services Agency is set to review its crypto regulations, potentially leading to lower taxes and allowing domestic funds to invest in tokens.
Japan is preparing to review its cryptocurrency regulations, which could result in lower taxes and allow domestic funds to invest in tokens, an official at the Financial Services Agency told Bloomberg.
The FSA is now reportedly set to assess whether regulating crypto under the Payments Act provides sufficient investor protection, as tokens are used primarily for investment rather than payment. The review could result in reclassifying crypto as financial instruments under Japan’s investment law, which would offer stronger protections, per a person familiar with the matter.
While no exact timeframe was revealed, the review, expected to continue through the winter, could reduce the current tax rate on crypto gains from as high as 55% to 20%, aligning with other investment assets like stocks, at a time when Japan’s crypto market is recovering with trading volumes at centralized exchanges nearing $10 billion per month, according to CCData.
In February, Japan took further steps to support its blockchain ecosystem by allowing local investment limited partnerships to invest in cryptocurrencies, part of a broader legislative change aimed at encouraging venture capital investment in web3 projects.
As crypto.news reported, the amendment to the Act on Strengthening Industrial Competitiveness aims to provide regulatory clarity for crypto-focused startups and boost Japan’s venture capital scene, underscoring the government’s intent to strengthen its crypto sector, paving the way for more significant developments in the web3 space.
This article first appeared at crypto.news
