Even if they have not made a profit through the sale of their shares, Japanese cryptocurrency issuers are required to pay a default 30% corporate tax rate on their holdings under the current law.

As part of its efforts to encourage expansion in the domestic financial and technology sectors, Japan’s government plans to relax the tax criteria that local crypto companies must meet.

Even if they have not made a profit through the sale of their assets, Japanese companies that issue cryptocurrencies are required to pay a flat corporate tax rate of thirty percent (30%) on the value of their holdings.

As a result of this, a number of locally-based blockchain and cryptocurrency companies, as well as talents, are said to have decided to establish themselves in other countries over the course of the past few years.

The fiscal committee of Japan’s ruling Liberal Democratic Party (LDP) met on December 15 and adopted a proposal that was previously submitted in August. The plan eliminates the need for crypto companies to pay taxes on paper profits from the tokens they have issued and hold. The more lenient crypto tax laws are expected to be introduced to parliament in January and go into effect on April 1, the first day of the new fiscal year in Japan.

In an interview with Bloomberg on December 15, LDP legislator and member of Web3’s policy office Akihisa Shiozaki commented that this is a big step forward, saying it would make it easier for a variety of companies to do business including the issuance of tokens. .

The most recent action taken by the government seems to indicate that, despite the FTX debacle, it is still eager to promote and develop the domestic cryptocurrency and Web3 sector. Prime Minister Fumio Kishida stressed in October that NFTs, blockchain, and Metaverse will play an important role in the nation’s digital transformation.

Global banking conglomerate Sumitomo Mitsui Financial Group (SMBC) said on Dec. 8 that it is collaborating on a project to investigate the applications of soul-bound tokens (SBTs).

SBTs are a reference to a concept created by Vitalik Buterin, one of the co-founders of Ethereum, about using tokens to represent people’s digital identities.