Asian countries appear to be emerging as the biggest beneficiaries of America’s massive crypto crackdown. Japan is no longer the leader of the crypto hub race, but it could also be a big winner in the war on the industry across the pond.
On June 26, the Japan Times reported that the crypto turmoil in the U.S. “could be a boon for Japan.”
Japan Crypto Ambitions Accelerated
Local industry players believe the crackdown could be an opportunity for Japan to grow its presence in the crypto space.
The aggressive action in America could help advance Asia and Japan as a hub for the sector since it has already established a solid legal framework.
On June 27, Coinbase CEO Brian Armstrong reacted to the article stating that the U.S. is squandering an early lead. This was in part “because SBF embarrassed some politicians and regulators who now want to look tough on crypto,” he added.
“The way to solve it is just get sensible regs in place so consumers are protected and these issues will stop happening.”
Tokyo-based crypto exchange Bitbank boss Noriyuki Hirosue commented:
“The U.S. regulators are increasingly tightening controls, but that doesn’t mean the same things will happen in Japan,”
Japan is a pioneer when it comes to crypto, being among the first nations to establish legislation and regulations for the asset class. It had two hard lessons to learn from with major incidents and losses from the Mt. Gox and Coincheck crypto exchanges.
Additionally, Japanese regulations are strict, requiring crypto exchanges to register with the government and submit annual reports. They also empower financial regulators to conduct on-site inspections and issue business improvement orders.
Furthermore, a revised Payment Services Act came into effect this month, enabling the use of registered stablecoins for payments. Noritaka Okabe, chief of Tokyo-based stablecoin startup JPYC, said:
“In terms of regulations for stablecoins, Japan is clearly ahead of other countries. We’ve been getting quite a lot of inquiries (from overseas),”
Conversely, the United States, which has slumped in financial freedom rankings, has no regulatory framework for crypto exchanges. Instead, it has lumped them in with banks, securities, and stock exchanges.
Easing Crypto Tax Rules
Japan’s National Tax Agency published a partial revision of its corporate tax guidelines earlier this month. They include a new set of regulations for digital token issuers, scrapping previous high taxes on unrealized gains from crypto assets issued by companies.
“This represents a step forward in improving the business environment [in Japan],” reported local media on the development.
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