Japanese cryptocurrency advocacy groups will petition the government to relax corporate tax regulations, allowing the growth of the country’s digital asset industry.
According to Bloomberg, the Virtual and Crypto Assets Exchange Association (JVCEA) and Cryptoasset Business Association (JCBA) are getting ready to submit a proposal to the Financial Services Agency (FSA) asking it to cut the cost for businesses to issue and hold cryptocurrency tokens.
Japan’s Web3 “brain drain” due to taxation
Currently, Japan levies a 30% corporate tax on digital assets, including unrealized gains. Lobby groups will push the government to suspend taxing paper profits on cryptocurrency holdings if businesses own them for reasons other than short-term trading, according to the document.
This is arguably being done to reduce the talent drain from the domestic crypto market and make it a lucrative hub for treasury investments.
The groups want to reduce the present rate of taxation on individual investors from up to 55% to 30%.
In April, the operator of BitFlyer, one of Japan’s leading cryptocurrency exchanges, was bought by ACA Group, a Japanese private equity group with offices in Singapore, which is a lower-tax jurisdiction.
“Japan is an impossible place to do business,” Sota Watanabe, chief executive officer of Web3 infrastructure developer Stake Technologies, told Bloomberg.
“The global battle for a Web3 hegemony is underway, and yet, Japan isn’t even at the start line,” Watanabe added.
With reports of Japanese Web3 companies shifting bases, the proposal may be presented to the authorities as early as this week, a JCBA official said.
Japan banks on Web3
Earlier this month, the country’s Ministry of Economy, Trade, and Industry (METI) established a Web3 policy office to not only collaborate on the digital front but also to understand the challenges of the sector better.
“The Web3 Policy Office will gather information from business operators, investors, legal professionals, engineers, and other parties regarding the issues facing Japan’s and overseas business environments and work with the relevant ministries and agencies toward developing the business environment for Web3,” METI announced.
And one of the biggest banks in Japan, Sumitomo Mitsui Banking Corporation (SMBC), also recently announced its intention to move into the non-fungible token (NFT) and Web3 space.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.