Time to ‘Redefine’ Crypto, Say Key Japan Lawmakers

2024-06-23 19:00:20

Tim Alper

Last updated:

June 23, 2024 23:00 EDT | 1 min read

Top Japanese lawmakers say it is time for the country to “redefine” crypto and its approach to regulation. The statements hint that further crypto reforms could be on their way in Tokyo.

Per the Japanese-language news outlet CoinPost, the comments came from two members of the ruling Liberal Democratic Party (LDP): Seiji Kihara, the head of the party’s “blockchain promotion” group, and Masaaki Taira, the chair of the party’s web3 adoption unit.

Time to ‘Redefine’ Crypto Has Come, Japanese MPs Agree

The duo agreed on the need to “redefine” legal terms pertaining to cryptoassets “such as Bitcoin (BTC).”

Kihara said that tokens are “legally defined in Japan” as a “type of substitute for” terms like “currency” or “money.”

However, the lawmaker noted, these same tokens are currently viewed as “assets” in the investment products space. Kihara called this a “contradiction,” and explained:

“The [crypto] market has grown and people are now investing in [crypto-related] financial products. Despite this, the contradictions that arose from its legal beginnings as a money substitute remain. That means we need to redefine [crypto-related legal terms].”

Taira concurred, saying that because crypto “plays a role similar to that played by gold,” the related terminology “needs to be redefined.”

Doing so, Taira said, would let “financial institutions such as banks and securities companies” handle coins “in a more normal manner.”

The lawmaker noted that Japanese crypto exchanges and securities companies are currently governed by separate laws. And, Taira noted, the Japanese tax “follows suit.”

Japan’s cryptocurrency exchange DMM Bitcoin said on Friday that it had lost 4,502.9 bitcoin, worth about ¥48.2 billion ($308 million), in what the company called an “unauthorized leak.”

— The Japan Times (@japantimes) June 1, 2024

More Crypto Reforms Incoming?

The nation’s crypto tax , many critics claim, is overly restrictive and has led many Japanese blockchain startups to exit the nation.

The government has responded by agreeing to reform the tax rules governing corporations.

But campaigners continue to press Tokyo to reform tax rules for individuals. At present, crypto traders can face tax bills worth up to 55% of their profits.

Japan’s economy contracted less than initially reported in January-March on upward revisions to capital spending and inventory data, lending modest support to the central bank’s plans to raise interest rates again this year pic.twitter.com/sNARDshEhk

— Reuters (@Reuters) June 10, 2024

The LDP, which has governed Japan since 1965, has this year indicated that it will indeed reform individual crypto tax rules.

A tax-related LDP white paper issued in April stated that crypto tax reform issues “should be addressed immediately.”

Taira has previously called on Tokyo to create a “minister of web3” to help accelerate blockchain-related growth in Japan.

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