Japan’s ruling Liberal Democratic Party’s Web3 project team has released a white paper containing proposals for expanding the country’s Web3 industry. The suggestions include modifications to tax regulations, establishing accounting standards, and a DAO law modeled after Japan’s godo kaisha. The recommendations aim to establish a welcoming atmosphere for cryptocurrency, as many companies have relocated to other countries due to high tax obligations.
The white paper also recommends that Japan exhibit leadership during this year’s G7 summit on cryptocurrency issues. The nation should focus on technology-agnostic and ethical innovation, the document states.
According to the team, Japan’s taxation system should exempt token issuers from paying taxes, allow self-assessments, and enable investors to carry forward their losses for up to three years. The white paper suggests that cryptocurrency should only be taxed when it is converted into fiat currency.
The absence of accounting standards has made it challenging for Web3 enterprises to locate auditors, the white paper notes. It recommends that ministries and agencies assist the Japanese Institute of Certified Public Accountants in creating guidelines. Additionally, a DAO law should be established, and modifications to the Companies Act and the Financial Instruments and Exchange Act should be made, according to the document.
Japan has already adopted a framework for regulating stablecoins in 2022. The new white paper emphasizes the importance of preparing the environment for stablecoin registration and creating a self-regulatory organization. It also suggests developing proposals for yen-backed stablecoins.
The Web3 project team aims to bypass the usual bureaucratic processes to formulate regulatory proposals for non-fungible tokens and decentralized autonomous organizations. The proposals aim to establish a more welcoming atmosphere for cryptocurrency, as many companies have relocated to other countries due to high tax obligations.
The white paper is a significant step towards establishing Japan as a leader in the Web3 industry. As the country prepares for the G7 summit, the recommendations could help shape the future of cryptocurrency regulation worldwide.