Japanese gov't issues NFTs to reward local authorities' work

Japanese gov’t issues NFTs to reward local authorities’ work

A total of seven mayors received the NFT awards for various initiatives they undertook to ease the lives of the public in their respective regions.

The Japanese government has become one of the first to issue nonfungible tokens (NFTs) as a form of supplementary rewards to recognize the work of local authorities who have excelled at using digital technology to solve local challenges.

The awards were handed out by the cabinet secretariat, a government agency that is headed by the nation’s chief cabinet secretary Hirokazu Matsuno during the “Summer Digi Denkoshien 2022” ceremony. The event was also attended by the country’s prime minister Fumio Kishida, reported Coinpost.

Seven mayors received recognition for their cities’ ideas centered on the digital economy. Among them was the mayor of Sakata, Yamagata Prefecture, whose administration suggested using electric vehicles for local deliveries. An NFT prize was also given to Maebashi in the Gunma Prefecture for their idea for a platform that uses cameras on mobile devices to track changes in traffic conditions in real time.

The NFTs were issued on the Ethereum blockchain using the proof of attendance protocol (POAP). The issued NFTs are non-transferable and have been developed in a way to make them suitable for commemoration. Being non-transferable, these NFTs cannot be traded on the secondary market.

The NFTs were issued using Indiesquare’s low-cost blockchain platform, the Hazama Base. The same platform was used earlier to issue and distribute NFTs at an event held by the Liberal Democratic Party Youth Bureau.

Related: Japan considers implementing tax reforms to prevent capital flight of crypto startups

Japan is known as a pro-technology and innovation country, where crypto has been regulated by the government as a trading asset. The country’s prime minister has also shared interest in the use of NFTs on a number of occasions in the past. Thus, the recent initiative from the government could become a tradition to carry forward.

NFTs gained a lot of traction during the peak of the bull run, however, with the downturn in the crypto market, the NFT market has seen a steep decline in interest as well. With many pundits quick to dismiss NFTs as a bull run fueled mania, initiatives taken by the Japanese government highlight the adoption of the nascent tech beyond market

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Japanese Government Rewards Local Authorities With Non-Transferable NFTs

Japanese Government Rewards Local Authorities With Non-Transferable NFTs

According to reports, the Japanese government is one of the first countries to use non-fungible tokens (NFTs) as a supplementary award to local authorities that excelled in a digitization competition. The awards were given to local authorities as recognition for their efforts in using digital technology to solve local challenges. Issuing and Distributing NFTs via […]
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Japan’s crypto groups call for end of taxing paper gains

Japan’s crypto groups call for end of taxing paper gains

Danny Talwar from crypto tax platform Koinly said Japan’s regulatory environment makes it difficult for businesses and individual investors to hold digital assets in Japan.

Japan’s leading crypto lobby groups plan to submit a proposal to Japan’s financial regulatory body to address its high crypto taxes, which experts warn make Japan less competitive as a crypto hub. 

According to an internal memo seen by Bloomberg, the proposal will be submitted to Japan’s Financial Services Agency (FSA) this week, asking them to put an end to taxing unrealized gains on crypto holdings “if the firm owns them for purposes other than short-term trades.”

The proposal also asks for the financial regulator to lower income tax rates on crypto earnings for individual investors to 20%, which is far less than the current rates that see some investors being taxed as high as 55%.

Head of Tax (APAC region) Danny Talwar from crypto tax platform Koinly told Cointelegraph that the current regulatory environment makes it difficult for businesses and individual investors to hold digital assets in Japan compared to more crypto-friendly nations:

“The high crypto tax rates make Japan less competitive on the international front compared to countries like Singapore and Dubai, which are increasingly becoming digital asset hubs for business.”

Talwar also said that the taxation of unrealized capital gains could lead to situations where taxes paid are not commensurate with the asset value on realization, and this is particularly common for volatile asset classes.

Talwar added that the acceptance of the proposals by the FSA would be a “step forward for crypto-friendly regulation” in Japan, though the exact contents of the proposal are not yet known.

As for regulation, Talwar acknowledged “it should not stifle innovation in this fast-growing industry.” But before doing so, it is important that lawmakers have a clear understanding of how the taxation of digital-assets fits within the current tax regimes and regulatory frameworks, he said.

Speaking to Bloomberg, Web3 infrastructure protocol Stake Technologies CEO Sota Watanabe said the current corporate tax rate was too high, making Japan “an impossible place to do business.”

“Japan is an impossible place to do business… the global battle for a Web 3.0 hegemony is under way, and yet, Japan isn’t even at the start line”.

Watanabe is one of several CEOs who relocated their crypto companies to Singapore, citing high taxes as one of the reasons for the transition.

Related: South Korea postpones 20% tax on crypto gains to 2025

Japanese politician Masaaki Taira also argued that lawmakers need to relax crypto regulations to “stem the outflow of digital talent”.

The proposal is reportedly being prepared by the The Japan Cryptoasset Business Association (JCBA) and the Japan Virtual & Crypto Assets Exchange Association (JVCAEA), whose members are made up of crypto firms including Bitcoin Association and forex broker WikiFX.

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Japan Ministry of Economy launches Web3 policy office

Japan Ministry of Economy launches Web3 policy office

The new body will bring together the financial regulators and creative industries to formulate the policies in the Metaverse.

In an important landmark for the buzzword, The Ministry of Economy, Trade and Industry (METI) of Japan opens its own Web3 Policy Office in the Minister’s Secretariat. The new entity commits to bringing together the departments responsible for industrial finance, taxation, corporate system and those that deal with media and content, sports, fashion and the other entertainment industries. 

The July 15 announcement specifies the mission of the new office would be to strengthen the framework for examining business environment issues related to Web3:

“Given that some entrepreneurs pursuing Web3-related business are leaving Japan for opportunities overseas, deliberations toward developing the business environment in Japan need to be accelerated.”

According to the release, developing the business environment for Web3 will also include formulating policies. Hence, the “Web3 Policy Office” could become something more than just a consultancy body. 

Related: Half of Asia’s affluent investors have crypto in their portfolio

In July, the University of Tokyo, also known as Todai, announced its first range of study programs that will take place in the Metaverse. The courses will be offered to students ranging from high school to adult learners in the workforce.

Other notable applications of the Metaverse in Japan over recent months include 29 trade schools under the NSG College League in Niigata holding their 2022 commencement ceremony in the Metaverse and launching a virtual support room for Hikkikomori in the SecondLife Metaverse platform.

Despite these vivid developments in Web3, Japanese regulators voice their anxiety on the matter of general crypto regulation. Speaking with journalists on July 18, an unnamed source “close to both industry and government” said that the current model of crypto regulation is faltering.

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