As part of Singapore's exploration of asset tokenization, the Monetary Authority of Singapore is teaming up with U.K. and Japan regulators in a project focusing on advancing legal, policy, and accounting handling of digital assets.
The proposed tax revision includes the elimination of year-end "unrealized gains" on digital assets, which Japan's FSA said would help promote a more favorable environment for Web3 technology.
Japan is tightening the screws on the local digital asset sector, recently flagging four companies on allegations that they violated fund settlement laws by operating without a necessary permit.
The Financial Services Agency said that work is currently underway to allow the domestic distribution of stablecoins in the country but added that there would be certain restrictions.
Japan is dead set on lifting the ban on stablecoins, with authorities gathering feedback on easing restrictions, opening a pathway for seamless stablecoin trading.
FTX Japan had been ordered to shut down its services, but an FSA extension pushes this to March as customers continue to wait for their funds.
FTX Japan halted withdrawals amid the collapse and bankruptcy filing of SBF’s FTX empire, with Japan’s regulator, FSA, ordering it to suspend operations.
After relaxing its digital asset listing regulations, Japan has its eyes set on improving taxation directives under a white paper being worked on by lawmaker Masaaki Taira.
Japanese investors can pay up to 55% in taxes on their digital assets, with firms forced to pay taxes on unrealized gains, leading to capital flight from the country.
The lobby groups specifically asked for the practice of taxing unrealized gains to be removed, while a uniform 20% tax regime with exemptions to allow for unrealized gains to be carried forward.
The Financial Services Agency has raised the alarm over the slow pace at which the digital assets self-regulatory body is carrying out its affairs, according to a source close to the JVCEA.