Japan categorizes Cryptocurrency as financial products! paving the way for encryption ETFs, encryption tax reduced to 20%

In order to promote the 'new capitalism' policy, the Japanese government plans to redefine Cryptocurrency as a financial product, not only paving the way for encryption ETF, but also intending to unify the personal encryption asset capital gains tax rate from 55% to 20%. According to the statistics of the Financial Services Agency (FSA) of Japan (FSA), there are already over 12 million people in Japan who have opened encryption accounts, and the proportion of investment in encryption assets has exceeded forex and bonds, indicating a rapid rise in demand for assets related to the encryption market.

Classify two types of encryption asset types based on whether the 'fundraising' function is enabled.

According to the official document of the Financial Services Agency (FSA) of Japan (FSA) on 6/24, this proposal will classify encryption assets according to the 'fundraising' function. Such 'business types' of encryption assets used for fundraising or project development, such as ICO or token sales. The issuer is required to provide accurate information disclosure for such assets.

Another type is 'non-fundraising', such as Bitcoin (BTC), Ethereum (ETH), or meme coin (Memecoin). The FSA considers 'exchanges' to provide information disclosure. As for NFTs, due to their diverse nature, they are currently not included in financial products for handling.

Approaching from the three points of compliance, market, and insider trading, a regulatory framework is proposed.

FSA also proposes three approaches to regulate encryption. First, any promotional activities under the guise of 'investment', such as seminars or online marketing, will be included in the regulatory scope to prevent misleading and fraudulent behavior.

In terms of exchange management, the FSA believes it is necessary to establish basic institutional and system management mechanisms, including the standardization of trading processes and system security requirements. However, due to the immature price formation mechanism in the encryption market, the FSA stated that it will not regulate as strictly as securities exchanges at this stage, but will adopt a relatively loose and flexible management approach.

In addition, the FSA also stated that in the future, it will further consider how to prevent improper behaviors such as insider trading and information abuse, and will refer to international practices, including the information disclosure model in the United States and the trading ban model in Europe, as a reference for regulatory design.

Define encryption assets as 'commodities' and include them in FIEA, reducing the tax rate to 20%.

FSA also revealed that it is currently planning to include encryption assets in the scope of the Financial Instruments and Exchange Act FIEA, and define them as 'financial products'. At the same time, FSA may also consider unifying the capital gains tax on 55% of Crypto Assets to a 20% tax rate similar to stocks, funds, and other financial products.

This policy has been incorporated into the "New Capitalism Implementation Plan" passed by the Cabinet on 6/13 this year and is being formulated by the FSA.

1200 institutions rush into Bitcoin ETF, Japan also wants to catch up

FSA pointed out that the purpose of reclassifying encryption assets this time is to help Japan launch Cryptocurrency ETF to pave the way for the (BTC) spot ETF currently listed in the United States.

FSA also cited the latest data, indicating that more than 1200 financial institutions currently hold US-listed Bitcoin ETFs, including major investment institutions such as US retirement funds and (Goldman Sachs). This shows that global funds are flowing into the crypto market at an accelerating pace, and Japan does not want to be left out.

Japanese encryption account broke 12 million, surpassing the number of participants in forex and bonds

According to the statistics from FSA as of January this year, there are over 12 million active encryption accounts opened in Japan, with total user assets of about 34 billion US dollars.

This number not only continues to grow, but even among some young, technology-oriented groups, the proportion of investment in encryption assets has exceeded forex and bonds, reflecting the increasing interest of the public in encryption assets.

SMBC collaborates with Ava Labs to develop stablecoin for real estate and bond settlements

In addition to tax system and ETF policies, Japan's attitude towards stable coins is also gradually opening up. In April this year, Sumitomo Mitsui Financial Group (SMBC) announced that it had signed a memorandum of cooperation with Ava Labs, Fireblocks, and TIS Inc., preparing to promote the commercialization of stable coins in Japan.

The goal is to issue a stablecoin pegged to the US dollar and the Japanese yen, and explore settlement applications for tokenizing assets such as stocks, bonds, real estate, etc.

Japan's first stablecoin license has been issued, and SBI is ready to support USDC

In terms of stablecoin policies, Japan also took a key step in March this year, with the FSA issuing the first stablecoin operating license to SBI Group's encryption exchange SBI VC Trade. SBI stated that it will prioritize supporting the international mainstream stablecoin USDC-related business to prepare for subsequent cross-border settlements or financial innovations.

(Japan stabilizes coin legalization! Circle and SBI join hands to launch USDC)

This article Japan will list Cryptocurrency as a financial product! Paving the way for encryption ETF, encryption tax reduced to 20% first appeared in Chain News ABMedia.