Crypto companies are urging the Japanese government to change the tax policies as its pushing a number of businesses to leave. Neither the Central Bank of Japan nor the government supports crypto assets.
Under Japan’s Payments Services Act (PSA), cryptocurrencies and utility tokens, like ETH and BTC are Gulatered as crypto assets. Businesses dealing with the same have to undergo registration as a provider of Crypto Asset Exchange Services. Security tokens, such as bonds and shares, fall under the Financial Instruments and Exchange Act (FIEA). Stable coins are classified as crypto assets or means of payments.
Token listings, as per Japan’s new tax plan for 2022, will continue to be taxed. Issuers have to pay tax, once the tokens get listed on the active market. The tax also has to be paid even if the tokens don’t sell. This is driving crypto businesses out of the country. Crypto project founders are closing their entities in Japan and moving to other countries.
Mai Fujimoto, the founder of Garcons, told the local media that eight such projects have left Japan. It included Astra Network. Seta Watanabe, the founder of the multi-chain decentralized application platform, said they had to wind up operations because of unclear regulation and high taxes. He highlighted that there is no clear definition of an active market. Watanabe added that the law was vague. This, he said has left them confused and uncertain. Crypto entrepreneurs say lack of supporting policies has left businesses and companies vulnerable.
In the past couple of years, the crypto market in Japan had recorded an upward trajectory. But analysts believe that harsh regulations threaten to hamper growth and innovation. Furthermore, they fear that crypto adoption and development will be limited in Asian countries because of their aging population