Japan is assessing whether to cut crypto taxes to 20% to appeal to a wide range of investors. This proposal arises when a country aims to potentially classify cryptos separately from financial instruments and securities under the Exchange Act.
Japan, home to the now-deprecated Mt. Gox Exchange, once at the top of its peak, is responsible for over 70% of Bitcoin transactions, but has a cryptography and a complex history. Following the hack that saw Mt. Gox abolish the 2014 hack, Japan implemented stronger investor protection, strengthened government surveillance and tightened regulations that curb bad actors.
The Liberal Democratic Party (LDP), Japan’s largest country, has announced a proposal to cut taxes on crypto investors, which has reached 55%. Kiyosawa, a member of the Japanese assembly, explained that the initiative is intended to promote market development, protect investors and cause separate taxation on crypto. The party is gathering opinions on the proposal until the end of March.
“The proposal aims to position Crypto Assets as a new asset class that is different from securities under the Financial Instruments and Exchange Act, developing markets, protecting investors and achieving individual taxation,” Shiozaki said.
The move has attracted praise from some members of the crypto industry. “This is how we can start a national strategic reserve with people for the people,” said Jeff Park, head of Alpha Strategies at Bitwise. “Japan is mobilizing to carry its own tariff war: subsidizes ownership of non-US financial assets,” he added.
Last month, Japanese financial services institutions announced that they were considering classifying digital assets as securities to enhance protection for retail investors, paving the way for approval of domestic spot Bitcoin exchange funds (ETFs).