The Japanese government is one of the biggest bettors on the crypto industry and wants to provide some relief to local companies by easing corporate tax regulations amidst the fallout of the FTX collapse.
The current situation in the market is uncertain, and many companies will struggle through the winter, meaning that authorities in some countries will have to step up.
The new proposal will exempt corporate entities from any taxes on paper gains that they acquire with cryptocurrencies held as assets.
It was pushed by the Liberal Democratic Party of Japan led by Akihisa Shizaki, who mentioned the new policy will allow companies to easier and faster issue tokens without worrying much about paying taxes.
Despite what has been happening in the crypto market during 2022, the Japanese government is still determined to support the industry, hoping that this sector will bring economic growth to the struggling economy.
The current corporate tax is 30% on crypto profits, but it will not be applied to issuers of new tokens.
The next year will be easier for Japanese crypto firms
The legislation will be working in full force since April 1, 2023. It is a massive step forward for the industry that may focus on generating new products and interesting financial instruments to promote healthier cash flow within the Japanese economy, which has been doing poorly for the last three years.
Note that the nation has been an important global technological hub for decades and still has one of the biggest economies in the world.
Steps that the Japanese government is taking toward ensuring that it will be one of the most attractive crypto hubs are impressive and indicate that the nation is interested in nurturing a strong crypto sector.
Should the whole world follow?
The short answer is “no”. The Japanese experiment is what other nations must carefully watch and look where it failed.
Easing every aspect of regulation can be a sure way to insurmountable challenges in the future. Many experts believe that the crypto industry must power through existing obstacles instead of relying on handouts from governments.