Japan’s Minister of Economy, Trade and Industry, Takeru Saito, he said on August 28, 2024, announced that it intends to grow its Web3 ecosystem through startup-friendly tax reforms.
Startup-Focused Tax Reforms Key to Web3 Industry Growth
In a bid to boost its Web3 industry, Japan may soon implement startup-focused tax reforms to make it easier for companies in the sector to grow. Speaking at the WebX conference, Saito highlighted the huge potential of Japanese Web3 and blockchain companies.
The minister stressed the importance of positive tax reforms to create an ecosystem that will attract companies and developers from around the world to Japan. Japanese Prime Minister Fumio Kishida echoed Saito’s views.
In a video speech at the WebX 2024 opening ceremony, Kishida said Web3 and blockchain companies could play a key role in solving many of Japan’s social problems. With sound tax and legal reforms, Web3 startups would have an easier time raising funds and helping generate fresh job opportunities in the country.
Interestingly, in July 2023, the Japan Blockchain Association (JBA) a petition was filed Concerned Japanese authorities want to cut taxes on crypto assets.
Kishida added that the government will work to create an environment conducive to the utilize of Web3 tokens, instant payments based on blockchain, and the revitalization of the content industry. Future policies regarding the Web3 industry will have user protection as one of the main principles.
Early signs of a change in attitude towards cryptocurrency startups were noticeable in September 2023, when the Japanese government announced measures to enable startups to receive investment cryptocurrency.
Regulatory hurdles remain in Japan
While the WebX conference instills confidence in Japan’s commitment to the Web3 industry, regulatory challenges surrounding digital currencies continue to raise concerns within the country’s cryptocurrency ecosystem.
For example, in July 2024, the leading cryptocurrency exchange gate.io closed its operations in Japan. The exchange said it intends to comply with financial rules wherever it operates, implicitly referring to strict cryptocurrency regulations due to concerns about money laundering and terrorism financing.
Japan’s strict cryptocurrency regulations are not without reason. In May 2024, DMM Bitcoin, Japan’s leading cryptocurrency exchangewas hacked, which resulted in loss of $305 million in Bitcoin (BTC).
On the other hand, if recent events are to be believed, institutional appetite for Bitcoin in Japan is apparently growing.
In June 2024, a joint study was conducted by Nomura Holdings and Laser Digital Holdings found that 54% of respondents – including 547 investment managers from family offices and public interest companies – said they would be interested in entering the digital asset market in the next three years.
Featured image from Unsplash, chart from TradingView
