Why Japan Could Ease Crypto Regulations To Revitalize Economy
Per a report from Bloomberg, crypto investors in Japan might soon benefit from a change in the country’s regulation. The Japanese Financial Service Agency (FSA) has filed a proposal that would grant benefits to individual and corporate investors in the digital asset sector and the legacy financial sector.
The shift in crypto regulations follows a strategy promoted by the Japanese executive aiming to support a reinvigoration of the economy. The Asian country has been affected by two years of a global pandemic, a spike in global inflation, and decades of economic slowdown.
Japan’s financial regulator wants to give investors a tax exemption for profits generated by crypto and stock investments. In addition, the FSA wants to implement a permanent program to incentivize individuals and institutions to invest in the nascent and legacy asset class.
The new Japanese administration led by Fumio Kishida from the Liberal Democratic Party is trying to implement a plan called “New Capitalism” and boost the country’s economy. Kishida vowed to increment the Japanese household’s average wealth and has promised to support the growth of crypto companies and the digital sector, in particular those working on “Web3”.
The Asian country has a tax break initiative, the report claims, called “Nippon Individual Savings Account”. The FSA has proposed the expansion of this initiative by raising its investment limits and extending its duration to grant investors a capital gains tax over a specific period of time.
Right now, Japan implements a 30% tax for profits and unrealized profits for crypto investors. This could be operating as deter pushing people away from putting money into the nascent and legacy financial sector.
Data from Bloomberg claims Japanese hold most of their saving in cash and bank deposits which contributes to the lack of momentum in the national economy. In addition, many companies have opted for setting up shop in friendlier countries, such as Singapore.
Japan Seeks To Attract Crypto Investments And Boost SpendingThe Asian country has been restricting its citizens’ access to the crypto economy. Japanese are allowed to invest in certain digital assets.
This has pushed many crypto companies in the country to ask for fewer taxes and more flexibility allowing companies to launch their projects in Japan. The FSA proposal might be the first step in that direction. The government might announce a decision by the end of the year, Bloomberg claims.
In addition to the possible change in its tax rules, the country has been encouraging people to spend more money and its younger population to “drink more alcohol”, says a separate report. This initiative was launched by the country’s National Tax Agency (NTA).
The Asian nation has one of the highest older populations in the world. This has led to a sharp decline in tax revenue from the domestic alcohol market. In 2020 alone, Japan lost over $100 billion from its alcohol sales.
Remains to be seen if any of these measures will have a positive impact on Japan’s economy. At the time of writing, Bitcoin (BTC) trades at $20,100 with sideways movement on the 4-hour chart.
BTC’s price moving sideways on the 4-hour chart. Source: BTCUSDT TradingviewOhNoCryptocurrency via https://www.ohnocrypto.com/ @Reynaldo Marquez, @Khareem Sudlow
