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Japan is Easing Corporate Tax for Cryptocurrency Holdings

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The ruling political party in Japan agreed to relax corporate tax regulations for cryptocurrencies, showing support for a sector that is still reeling from Sam Bankman-Fried’s crypto empire’s collapse.

According to a member of the Liberal Democratic Party, the tax committee on Thursday approved a proposal to exempt businesses from paying taxes on paper gains on cryptocurrency they hold after issuing.

“This is a very big step forward.”“It will become easier for various companies to do business that involves issuing tokens.”  

said Akihisa Shiozaki, an LDP lawmaker at a briefing

Japan moves positively amidst FTX’s fall

The action shows that, despite the industry being rocked by FTX’s collapse, policymakers in Japan are still relying on crypto technologies to spur growth. Japan currently levies a corporate tax of about 30% on cryptocurrency profits, including unrealized gains.

Based on the decisions made by the party, Prime Minister Fumio Kishida’s administration will complete its annual tax policy guidelines by year’s end.

Typically, the government presents legislation to the legislature in January to update the tax laws for a new fiscal year beginning on April 1.

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Japan is Easing Corporate Tax for Cryptocurrency Holdings 2

Japan eased crypto listing process

Japan aims to further relax cryptocurrency regulations by making it easier to list virtual coins, which might make the nation more appealing to Binance and other foreign digital-asset exchanges.

Unless the tokens are completely new to the Japanese market, the organization that regulates cryptocurrency exchanges intends to allow them to sell coins without subjecting them to its time-consuming screening procedure.

The relaxed regulations may become effective as early as December, making it simpler for startups to compete with well-established companies by facilitating the listing of tokens and lowering the entry bar. The member companies have just received the documentation outlining the changes.

In remarks he described as personal opinions, vice chairman Genki Oda suggested that the Japan Virtual and Crypto Assets Exchange Association might also do away with pre-screenings for coins that are new to the nation as well as for tokens issued via initial coin or exchange offers.

The country is treating the revival of its cryptocurrency sector more seriously, breaking with the regulatory tightening of recent years.

Japan To Ease Crypto Listing Process; Dumping Screening

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By making it simpler to list virtual coins, Japan aims to further relax cryptocurrency regulations, which might increase the country’s appeal to Binance and other overseas digital-asset exchanges.

According to records obtained by Bloomberg News, the organization that oversees cryptocurrency exchanges intends to permit them to sell coins without subjecting them to its time-consuming screening procedure unless the tokens are brand new to the Japanese market.

Japan’s new listing rules might go out in December

As early as December, the loosened regulation may go into force, making it easier for startups to compete with established firms by facilitating the listing of tokens and decreasing the entrance barrier. The documentation explaining the modifications was recently sent to member businesses.

Vice Chairman Genki Oda stated in comments he described as personal opinions that the Japan Virtual and Crypto assets Exchange Association might also do away with pre-screenings for coins that are new to the country as well as for tokens issued via initial coin or exchange offers.

In a departure from the regulatory tightening of recent years, Japan is taking the revitalization of its cryptocurrency sector more seriously. Four years after retreating, Binance, the largest digital asset exchange in the world, is again seeking a license to operate in Japan.

The efforts taken by the nation contrast with the stricter regulation appearing in several countries after a $2 trillion wipeout of digital assets from their peak last year led to explosions at crypto hedge firms.

The most recent actions go beyond the JVCEA “Greenlist” that was first announced in 2022 and allowed some tokens to qualify for quicker postings. The JVCEA will keep an eye out for any “inappropriate” coins and may request that member businesses cease selling them.

Every three months, cryptocurrency exchanges will have to submit reports to the JVCEA regarding occurrences involving the listed currencies, such as so-called hard forks, in which a blockchain divides due to modifications to the underlying software code.

In Japan, more than 50 coins are swapped, up from less than half two years ago, in part because of speedier listing checks, according to Oda.

Lazarus group alert: Japanese Police issue warning

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The crypto-verse has had a number of hacks and attacks throughout the years. The Lazarus Group, located in North Korea, was recently found to be behind some of the most destructive attacks on the industry. The Lazarus Group has been engaged in cryptocurrency-related phishing breaches for a number of years, according to recent information from the Japanese government.

The Financial Services Agency (FSA) and Japan’s National Police Agency (NPA) have warned crypto platforms to be on the lookout for phishing scams. These organizations think that the primary reason the hacker gang has been taking cryptocurrency is that it is “handled more loosely.”

The statement went on to describe these phishing attacks in more detail. It read,

“This cyber attack group sends phishing emails to employees impersonating executives of the target company […] through social networking sites with false accounts, pretending to conduct business transactions […] The cyber-attack group [then] uses the malware as a foothold to gain access to the victim’s network.”

Therefore, businesses all around the country were urged not to click email attachments or even URLs carelessly. Downloading files from unverified sources was advised to be avoided, especially with reference to encryption.

The NPA also recommended “installing security software,” “using multi-factor authentication,” and avoiding using the same password across numerous platforms or services for owners of digital assets.

The community then began to wonder if the Lazarus Group would continue to get money from Japan.

The Lazarus group saga to continue?

The North Korean government’s support for the Lazarus Group is known to everyone worldwide. The community has seen numerous cryptocurrency platforms fail over the years. The Lazarus Group has established its control over these bridges, first with the Ronin Bridge breach and most recently with the Harmony’s Horizon Bridge hack.

Despite the Japanese government’s attempts, the Lazarus organization has persisted in destabilizing crypto companies there. It was revealed that crypto businesses have received many warning letters from the NPA and FSA. The most recent warning is said to be the fifth.

Therefore, it was unlikely that the Lazarus Group would see a decline in support from Japan.

Ripple’s New Partnership Will Bolster Web3 Development in Japan

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A new partnership with Ripple will aid in bolstering web3 development. “Web3 Design Lab,” a new service launched by btrax Inc., is intended to assist Japanese businesses in accelerating the development of their Web3 businesses for the international market.

Takahito Iguchi, a seasoned businessman and the CEO of Audio Metaverse, has been chosen as the service’s sole advisor.

To build Web3 Design Lab alongside the XRP Ledger (XRPL), btrax will collaborate with Ripple, the market leader in enterprise blockchain and cryptocurrency solutions, in conjunction with the launch.

“For nearly 10 years, Ripple has been a robust technical partner to enterprises in search of crypto and blockchain solutions to help accelerate their business, while the XRPL has served as the best-in-class blockchain for settlement of tokenized assets at scale,” said Emi Yoshikawa, VP of Strategy and Operations.

Ripple has been a helping hand in Japan

Japan’s market has long been a stronghold for ripple. To enhance cross-border payments to the Philippines, it teamed up with SBI Remit, the biggest money transfer company in the nation, last year.

Before choosing to remain in San Francisco, XRP thought of moving its headquarters base to Japan. Despite the legal clampdown in the US, the company keeps expanding globally.

As a design partner and provider of design services utilizing XRPs blockchain and cryptocurrency solutions, Web3 Design Lab supports the growth of Japanese businesses.

By encouraging a proper understanding of Web3, which is quickly gaining attention globally and is anticipated to grow further in the future, btrax hopes to help revitalize the global business of Japanese companies.

On August 18, Ripple and Travelex, a bank in Latin America, announced a new partnership to increase instant cross-border crypto payments in Brazil using its On-Demand Liquidity (ODL) service. Ripple has been a helping aid in cross-border payments.

Ripple Hosts Japanese Mayor To Boost Web3 Adoption

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A top exec at Ripple, Emi Yoshikawa, welcomed the mayor of Japan’s Fukuoka city, Soichiro Takashima, to the blockchain firm’s headquarters along with a picture in the tweet saying,

“We welcomed Fukuoka City Mayor Soichiro Takashima and his team at Ripple HQ today! Fukuoka is a leading city in web3 initiatives in Japan. Today, Mayor Takashima of Fukuoka City and people from the international department visited the headquarters! I have high hopes for Fukuoka City, which is actively working on Web3.”

A few days ago, Japan’s largest money transfer provider SBI Remit announced that it will utilize RippleNet Technology to allow instant money transfers between Japan and Thailand.

“This makes it possible for 47,000 Thai nationals living in Japan to send money home faster. SBI Remit’s customers can use ATMs to instantly send money in JPY to a recipient’s SCB savings account in Thailand and receive funds in THB within seconds,” Ripple wrote in its PR.

In July 2021, the payment firm rolled out its first ODL service implementation in Japan, to expand its footprint in the Asia-Pacific [APAC], a key region for the firm. As per a report published in March 2022, Ripple saw a whopping 130% yearly basis growth in APAC Transactions.

The surge has been attributed to increased demand for quick settlements and immediate access to funds.

The launch comes at a time when the leading provider of enterprise blockchain and cryptocurrency solutions launched RippleNet’s On-Demand Liquidity [ODL] in Brazil with Travelex Bank, the first bank in Latin America to adopt the technology.

High Optimism Around Ripple Ecosystem

According to data analytics site Santiment, there has been notable whale activity, as well as high optimism, surrounding the Ripple ecosystem and the token XRP. Over 450 transactions carrying XRP worth over $100,000 each have been moving between wallets and exchanges in just 24 hours.

As disclosed by the market intelligence platform, the XRP network has tapped the largest amount of whale transactions in more than 3 months. The 13th of May was the last time this feat was achieved.

Additionally, sentiment is at its highest since April, the report read.

Ripple’s gift to Japan-Thailand remittance payments

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The cryptocurrency company Ripple has announced the beginning of a new cooperative effort with SBI Remit to speed up money transactions between Japan and Thailand. The project would enable Thais living in Japan to instantly transfer money home using RippleNet technology thanks to SBI Remit, the leading payment service in Japan. The Thai side in this endeavor will be represented by Siam Commercial Bank.

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Source: Twitter

According to the press release, in one second, the yen will be accessible for withdrawal in Thai baht in Thailand thanks to the implementation, which will enable more than 47,000 Thais living in Japan to transmit money freely using ATMs. Prior to this, a special agent was needed to complete the transaction, which was primarily made with cash.

Nobuo Ando, representative Director at SBI Remit, said,

“It is our duty to continuously search for superior technological solutions to deliver ever improving remittance services for our customers. With the steady rise of remittance flows, we see Ripple helping us open up new revenue potential for our business and a better overall experience for our customers.”

Asia welcomes Ripple with open arms

While Ripple is being fully utilized by Asian nations and businesses, that are integrating XRP into their operations, in the United States, the company is facing significant regulatory pressure from the Securities and Exchange Commission. However, it appears like Ripple chose to commit $100,000,000 to this and place everything in the hands of attorneys after discovering the rules of this “battle” in order to focus all of its resources and attention on its primary business.

In other news, according to a business representative, Ripple Labs Inc., which is involved in a well-known legal dispute with the U.S. Securities and Exchange Commission, is considering buying some of the assets of the defunct cryptocurrency lender Celsius Network. This announcement was made by the firm earlier this week.

Furthermore, according to Ripple’s most recent study, 76% of financial institutions worldwide would employ blockchain technology and cryptocurrencies by 2025, and the business obviously wants a bigger share of that market. From this perspective, it makes the most sense for Ripple to expand into Asia, which thanks to technology is currently one of the world’s most rapidly rising regions.

XRP Rewards Programs Now In Japanese Shinsei Bank

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XRP along with BTC is now part of reward campaigns in a top Japanese bank called Shinsei Bank. According to reports, the newly launched initiative is available for both new and existing customers till Oct. 31.

Users can take home earnings of up to 8,000 Japanese Yen [$60] worth of XRP for availing various services on the platform that includes opening an account, first-time login into the Bank’s portal, making the first deposit, etc.

For instance, opening a new account will carry a reward of a 500 yen [$3.72] coupon. Conducting inter-bank transfers will allow a client to earn up to 2,500 yen [$18.86]. In addition to that, the cash coupons are redeemable in both XRP and Bitcoin [BTC].

Also, it is currently not specified if the Bank accepts any other cryptocurrency apart from XRP and BTC as a reward.

Nevertheless, the latest move is another step forward to expand crypto’s use cases in traditional legacy firms.

XRP Adoption Grows

One of XRP’s major backers- Ripple Labs has spread out largely in Asia, even being adopted by a well-known financial giant. SBI Holdings, a major financial services provider, announced that it renewed its XRP international remittance service using On-Demand Liquidity [ODL]. 

According to a press release, the international remittance service system powered by ODL has been developed into a multi-tenant system that can connect with several remittance-focused firms and crypto exchanges.

Furthermore, the Japanese financial services giant said it is planning to boost Ripple’s On-Demand Liquidity effectiveness in international and domestic remittance. 

SBI’s tapping of the ODL service came a few hours after Ripple released its Q2 2022 financial report. Per the details, ODL adoption reached a peak in the second quarter of 2022, leading to the sale of $408.9 million worth of XRP. 

Ripple, an Enterprise blockchain and crypto solutions provider has also joined hands with FOMO Pay. FOMO Pay is a prominent Singapore-based institutional digital payment solution provider and has become the latest firm to integrate with Ripple’s liquidity solution.

Through this integration, FOMO Pay is planning on using Ripple’s crypto-enabled enterprise technology which is supposed to enable its cross-border treasury flows.

Japan’s New Law Might Assist in Taking Hold of Stolen Crypto

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According to reports, Japan’s Justice Ministry is considering revising an asset seizure statute connected to organized crime to include a provision allowing crypto to be hijacked in such cases.

If the rumors are confirmed, a possible modification of the Act on Organized Crimes and the Control of Proceeds of Crime (1999) will allow law enforcement authorities and judges to seize crypto assets used in illegal activities such as money laundering.

According to statements from news stations like the Yomiuri Shimbun on June 4, the Justice Ministry will need to first engage in discussions with the Legislative Council before moving forward.

Japan’s new seizure law might include crypto

According to the Jiji Press, talks with the legislative Council could begin as early as next month.

Due to the fact that the specific law focused on the seizure of funds/assets from organized crime does not explicitly outline any procedure regarding illegally acquired cryptocurrencies, there is concern that criminals may be able to continue their illicit behavior through their unseized digital asset holdings.

Physical property, monetary claims, and mobile assets such as machinery, cars, tools, and supplies are the only assets that can be confiscated under current legislation, with crypto falling under none of those categories.

The adjustment to the law would next need to be authorized by the cabinet and then endorsed by parliament, and given the nature of such a proposal, it is unlikely to face much opposition.

The study comes just days after Japan’s government passed a bill prohibiting non-banking entities from issuing stablecoins in an effort to reduce system risk and improve consumer safety.

Only licensed banks, registered money transfer agents, and local trust firms are permitted to produce and issue stablecoins under the bill.

Stablecoin bill to enshrine investor protection: Japan

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Last month’s collapse of the TerraUSD token thrust stablecoins into the worldwide spotlight, and Japan became one of the first large economies to build a legal framework around them.

With these move, Japan is no longer just the land of rising sun, it is also the land of rising cryptocurrency regulations.

On Friday, Japan’s parliament enacted a bill clarifying the legal status of stablecoins, essentially establishing them as digital money. According to the new law, stablecoins must be tied to the yen or another legal money and guarantee holders the ability to redeem them at face value.

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Stablecoins can only be issued by licenced banks, registered money transfer agents, and trust businesses, according to the legal definition. Existing asset-backed stablecoins from offshore issuers like Tether, as well as their algorithmic counterparts, are not covered by the Act. Stablecoins are not listed on any Japanese cryptocurrency exchanges.

After the implosion of TerraUSD, which resulted in multibillion-dollar losses from a theoretically safe asset, governments around the world are scrambling to create guardrails around stablecoins, a critical aspect of the cryptocurrency business. According to data gathered by CoinGecko, such tokens have a combined market value of around $161 billion, led by Tether, Circle’s USD Coin, and Binance USD.

Japan yet to regulate stablecoin issuers

In a year, the new legal framework will take effect. In the coming months, Japan’s Financial Services Agency plans to create laws controlling stablecoin issuers.

Once the legal structure is in place, Mitsubishi UFJ Trust and Banking Corp. aims to issue its own stablecoin, named Progmat Coin. The bank, a subsidiary of Mitsubishi UFJ Financial Group Inc., stated that the token will be fully backed by yen held in a trust account and that redemption at face value will be guaranteed.

When the combination of algorithms and trader rewards meant to safeguard the link failed to work as planned in early May, TerraUSD, or UST, began slipping from its intended 1-to-1 peg to the US dollar. The crisis triggered a massive selloff across all cryptocurrencies, ultimately bringing the Terra blockchain, which underpins UST and its sister currency Luna, to a halt.

The collapse harmed faith in other stablecoins as well, with Tether sliding from its dollar peg at one point. Since the event, the value of Tether has decreased by more than $20 billion.

The Terra community voted in late May to support a plan to create a new blockchain that does not include the UST token. The stablecoin is still based on the outdated Terra Classic network and has lost nearly all of its value.

Japan’s Quest For CBDC Enters Phase 2; What’s Next?

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The Bank of Japan’s initiative for a digital Yen has entered its second stage which centered around restrictions on holdings and transactions, as stated in the press release.

The first stage completed in March focused on issues related to the basic functions of a CBDC, including its issuance, withdrawal from financial institutions, and transfers between them.

April marked the onset of the second phase that revolved around implementing measures such as preventing funds from being shifted from bank deposits to a CBDC which it claims threatened financial system stability.

Specifically, the BOJ is examining restrictions on the maximum amount of a CBDC that a person can hold and that can be transferred at one time. Issues related to holders of multiple CBDC accounts at different financial institutions will also be studied.

As per the P.A, BOJ plans to complete the second stage in March next year. It also intends to conduct a pilot test involving the participation of consumers and businesses in the future.

Japan’s Central Bank takes inspiration from Swedish Model

Japan after a careful and thorough analytical approach toward the introduction of its central bank digital currency (CBDC), has decided to take a leaf out of Sweden’s detail-oriented approach to digital currencies.

This was revealed by the Head of the payments system department at the BOJ, Kazushige Kamiyama, who in a recent interview said that the Bank of Japan would follow a model similar to Sweden’s for its central bank digital currency and not China’s as previously believed.

“Japan has a strategy to launch the digital currency slowly and steadily rather than implementing large pilot programs in bulk right from the beginning”, one report said. 

Kamiyana asserted that the gradual expansion that Japan is planning to adopt was inspired by Sweden and is “suited best for the country.” He further said that the design and framework of the central bank’s digital currency need to be considered as part of a system of overall settlement for the future. 

The Bank of Japan governor, Haruhiko Kuroda, said that a decision to issue a CBDC would be made only by 2026.