Indian Central Bank: Developing Global Crypto Regulation Is a Priority for G20 Under India’s Presidency

Indian Central Bank: Developing Global Crypto Regulation Is a Priority for G20 Under India's PresidencyThe Reserve Bank of India (RBI) says one of the priorities for the G20 under India’s presidency is to “develop a framework for global regulation, including the possibility of prohibition, of unbacked crypto assets, stablecoins, and defi.” The Indian central bank warned that “turmoil in crypto assets market” is among “the major risks that can […]
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Japanese Gaming Company Gumi Partners With Square Enix and SBI Holdings to Strengthen Metaverse Pivot

gumi metaverse square enix SBI holdings japanGumi, a Japanese mobile gaming company, has partnered with Square Enix and SBI Holdings to build new business opportunities around the metaverse. The deal, which also includes the issuance of new stock valued at $52.7 million dollars, will allow the company to acquire financial and content creation experience. Gumi Raises $52.7 Million in Metaverse-Driven Alliance […]
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Japan to lift the ban on foreign stablecoins like USDT in 2023: Report

None of the 31 crypto exchanges registered with Japan’s Financial Services Agency are currently offering trading in stablecoins like USDT or USDC.

Japanese regulators are reconsidering some major cryptocurrency restrictions related to the use of stablecoins like Tether (USDT) or USD Coin (USDC).

The Financial Services Agency (FSA) of Japan will lift the ban on the domestic distribution of foreign-issued stablecoins in 2023, local news agency Nikkei reported on Dec. 26.

The new stablecoin regulations in Japan will allow local exchanges to handle stablecoin trading under the condition of asset preservation by deposits and an upper limit of remittance. “If payment using stablecoins spreads, international remittances may become faster and cheaper,” the report notes.

Allowing stablecoin distribution in Japan will also require more regulations related to Anti-Money Laundering controls, the FSA said. The authority on Monday started collecting feedback on proposals for lifting the stablecoin ban in Japan. As previously reported, Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions in June 2022.

The latest measure will significantly impact cryptocurrency trading services offered in Japan as currently, no local exchanges provide trading in stablecoins like USDT or USDC.

According to official data, none of the 31 Japanese exchanges registered with the FSA — including firms like BitFlyer or Coincheck — were handling trading in stablecoins as of Nov. 30, 2022.

BitFlyer, one of the largest cryptocurrency exchanges in Japan, trades a total of five cryptocurrencies at the time of writing, including Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), XRP (XRP) and Stellar (XLM), according to data from CoinGecko.

The FSA did not immediately respond to Cointelegraph’s request for comment.

Related: Stablecoin settlements can surpass all major card networks in 2023: Data

Japanese authorities have been actively working on crypto-related regulations recently. On Dec. 15, Japan’s ruling party, the Liberal Democratic Party’s tax committee, approved a proposal removing the requirement for crypto firms to pay taxes on paper gains issued tokens. Previously, local regulators also issued recommendations against the usage of algorithmic stablecoins like TerraUSD (UST).

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Japan set to ease 30% crypto tax on paper profits for token issuers

As it stands, Japanese crypto issuers are required to pay a set 30% corporate tax rate on their holdings, even if they haven’t realized a profit through a sale.

The Japanese government is set to ease tax requirements for local crypto firms, as it pushes to stimulate growth in the domestic finance and tech sectors.

At present, Japanese firms that issue crypto are required to pay a set 30% corporate tax rate on their holdings, even if they haven’t realized a profit through a sale. As such, a number of domestically founded crypto/blockchain firms and talent have reportedly chosen to set up shop elsewhere over the past few years.

Japan’s ruling party, the Liberal Democratic Party’s (LDP) tax committee held a meeting on Dec. 15 and approved a proposal — initially tabled in August — which removes the requirement for crypto companies to pay taxes on paper gains from tokens that they have issued and held.

The softer crypto tax rules are expected to be submitted to parliament in January, and go into effect for Japan’s next financial year starting on April 1.

Speaking to Bloomberg on Dec. 15, LDP lawmaker and member of its Web3 policy office Akihisa Shiozaki noted that “this is a very big step forward,” adding that “It will become easier for various companies to do business that involves issuing tokens.”

The latest move from the government appears to signal that its hunger to promote and develop the domestic crypto and Web3 sector hasn’t waned despite the FTX disaster,

Prime Minister Fumio Kishida emphasized in October that NFTs, blockchain and the Metaverse will play important roles in the nation’s digital transformation. The PM cited the digitization of national identity cards as an example.

In October the Japan Virtual and Crypto Assets Exchange Association also announced plans to walk back the stringent screening process for listing new tokens on exchanges, something which Kishida had called on the self-regulatory organization to do back in June.

Related: FTX wants permission to sell FTX Japan and FTX Europe as well as LedgerX

Such forward thinking sentiments have also been shared by key figures in the private sector. On Dec. 8 banking giant Sumitomo Mitsui Financial Group (SMBC) announced that it is working on an initiative to explore the use cases of soulbound tokens (SBTs).

SBTs refer to a proposal from Ethereum co-founder Vitalik Buterin concerning the use of tokens to represent people’s digital identity.

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Japan recommends against algorithmic backing in stablecoins

The potential legal status of the Japanese Financial Service Agency’s recommendation is not clear as the current legislation is silent on algorithmic stablecoins.

After passing its landmark legislation on stablecoins in June, Japanese regulators are considering complementing it by restricting the algorithmic backing of stablecoins. The intention comes as a recommendation from the Financial Service Agency (FSA) and was repeated by the country’s Vice Minister for International Affairs, Tomoko Amaya. 

During his speech on crypto assets at a roundtable hosted by the Official Monetary and Financial Institutions Forum (OMFIF), Amaya laid out Japan’s regulatory framework, emphasizing the factors of financial stability, user protection, and anti-money laundering/ combating the financing of terrorism (AML/CFT). The speech was originally held in November, but the FSA published the full document on Dec 7.

The 29-paged presentation systemizes the Japanese approach to crypto regulation, formed by several major legislations — the Banking Act, the Payment Services Act and the Financial Instruments and Exchange Act. One familiar with the Japanese regulatory environment couldn’t find anything new at this point, although the accent on differentiating between the “crypto assets” and “digital-money type stablecoins” gives a distinct perspective on the local regulators’ approach to the latter.

Related: Bank of Japan to trial digital yen with three megabanks

Amaya’s speech also doesn’t specify any particular dates or headlines for future legislation. However, at the end of the document, in the “Way Forward” section, the Vice Minister cites the FSA recommendations, reportedly made in October. As the quote goes:

“The proposed review states that ‘global stablecoins must not use algorithms in stabilizing their value’ and strengthens the ensuring of redemption rights.” 

This recommendation would probably be taken into consideration by lawmakers in the future, as the current stablecoins’ regulation, which was passed by Parliament in June and will become law in June 2023, doesn’t cover algorithmic stablecoins. The bill itself came in the aftermath of a massive decline in cryptocurrency markets fueled by the Terra tokens collapse, with the algorithmic stablecoin Terra USD (UST) losing its 1:1 value to the U.S. dollar in early May.

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CBDC

Japan’s Premier International Payment System Develops Plastic Card For CBDC

CBDC

With over 100 experimental projects in the process, central bank digital currency, or CBDC has become a global trendsetter. Japan is also embracing this trend and making quick and drastic moves to issue its national digital currency. Japan Credit Bureau (JCB), a Japanese international financial services provider, said that it will conduct central bank digital […]

The post Japan’s Premier International Payment System Develops Plastic Card For CBDC appeared first on Blockonomi.

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