Japan was an early adopter of blockchain technology and cryptocurrencies before exchange breaches prompted a ban. But as the crypto market advances, the government has become a crypto supporter.
The race to promote and adopt the crypto market and its benefits for the growth of financial systems has led many countries to introduce new updates and crypto solutions.
Japan is among these countries striving to step up and promote better crypto accessibility solutions for its community.
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Masaaki Taira, a politician in the ruling Liberal Democratic Party and the chairman of its Web 3.0 project team, said on Thursday at the NexTech Week trade exhibition in Tokyo that Japan has seen the future — and its blockchain.
Taira, a vocal proponent of Bitcoin, used his presentation on national strategies for emerging technologies to showcase Japan’s potential in Web3, or the concept of a new Internet based on decentralized blockchain technology, the metaverse, and non-fungible tokens (NFTs).
“While other jurisdictions attempt to regulate a space that is not yet fully understood, Japan already has a relatively good grasp of what it is that we’re trying to promote,” Taira said, adding that global technology businesses are taking notice.
Japan’s government and Prime Minister Fumio Kishida have embraced developing technologies, particularly Web3, as foundations of the country’s economic future. This comes when U.S. cryptocurrency exchanges are sued, causing regulatory chaos and casting questions on the country’s Web3 future.
In comparison, a white paper from the Japanese government that came out in April explained how the country could get everyone to use Web3, which includes crypto. Since the paper came out a few weeks ago, it has become a “major talking point” in Japan and around the world, said Taira.
Crypto Adoptions in Japan:
Before the government’s shift toward crypto and blockchain started picking up speed at the start of this year, it seemed like the digital asset space in Japan was stuck.
Even though Japan was one of the first countries to use cryptocurrency, the 2014 failure of the Tokyo-based cryptocurrency exchange Mt Gox and the 2018 hack of the Coincheck exchange, in which hundreds of millions of dollars worth of cryptocurrency was stolen, have hurt trust in the industry.
The Financial Services Agency then cracked down on trade platforms, making them follow stricter rules. This caused some exchanges, including Binance, to leave the country in 2018.
But when the FTX exchange failed in November of last year, customers worldwide lost a lot of savings and investments. Japan’s FTX clients were protected, and their money is in the process of returning to them.
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According to Taira, Japan’s cryptocurrency exchanges are the safest globally. He further mentions that it’s hard to believe that company and customer assets weren’t kept separate during the FTX situation.”
In his discussion about Japan’s crypto market and its potential, he also talked about Japan’s progress concerning the crypto market so far.
Taira also shares that Japan’s experiments with stablecoins are paying off. The government advisory group he heads is looking into ways to link public and private blockchains to make them more scalable.
Aside from that, he said that Japan’s soft power strengths in anime, manga, and games work well in the Web3 space, especially in NFTs and metaverse development, which have a lot of promise but haven’t been fully explored yet.
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How is Japan Planning to Grow Its Web 3.0 Industry?
The Web3 project team of Japan’s ruling Liberal Democratic Party just submitted a whitepaper with suggestions for improving the country’s crypto industry. This is part of Prime Minister Fumio Kishida’s “Cool Japan” project to promote technology.
Other governments are trying to put regulations in place to protect customers. Still, Japan is trying to make a friendlier environment for crypto because companies started leaving because of the high taxes.
The white paper says that Japan should show leadership at this year’s Group of Seven meetings, where crypto will be discussed.
It also says that the country should look ahead to the future potential of Web3 and clarify its leading stance on technology-neutral and responsible innovation.
It also suggests making more changes to tax rules, pointing out that token producers have already been given a big break.
One of the ideas is to not tax companies that hold tokens made by other companies that won’t be sold in the near future. It says buyers should be able to self-assess so that losses can be carried over for three years. It also says that crypto assets should only be taxed when traded for fiat currency.
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