Japan’s FSA to reclassify crypto in upcoming rule review: report

Japan’s Financial Services Agency will review crypto regulations, potentially allowing taxes to be reduced and local funds to invest in tokens.

Japan is preparing to review cryptocurrency regulations that could result in lower taxes and allow domestic funds to invest in tokens, an official at the Financial Services Agency told Bloomberg.

The FSA is reportedly now preparing to consider whether regulating cryptocurrencies under the Payments Act provides sufficient investor protection, as tokens are primarily used for investment rather than payment. The review could result in the cryptocurrency being reclassified as a financial instrument under Japan’s investment law, which could provide stronger protections, according to a person familiar with the matter.

Although no exact timeframe has been announced, the review, which is expected to continue throughout the winter, could reduce the current tax rate on crypto gains from 55% to as low as 20%, in line with other investment assets such as stocks, at a time when Japan’s cryptocurrencies are on the rise. The market is recovering, with trading volumes on centralized exchanges approaching $10 billion per month, according to CCData.

In February, Japan took further steps to support the blockchain ecosystem by allowing local investment limited partnerships to invest in cryptocurrencies as part of a broader regulatory change aimed at encouraging venture capital investment in web3 projects.

As crypto.news reported, the amendment to the Industrial Competition Enhancement Act aims to provide regulatory clarity for crypto-focused startups and strengthen Japan’s venture capital scene; It underlines the government’s intention to strengthen the crypto sector, paving the way for more significant developments in the cryptocurrency sector. web3 domain.