Japan to reform tax laws on long-term crypto holdings


  • Japan is set to revise its taxation policies for cryptocurrencies, aiming to exempt businesses from taxes on unrealized gains for long-term holdings.
  • The new tax regime is part of Japan’s strategy to stimulate liquidity in the cryptocurrency market and align with other Asian crypto hubs.
  • Under the proposed changes, Japanese companies would no longer pay corporate taxes on the year-end valuation of their crypto assets.

In a significant move, Japan is set to overhaul its taxation policies regarding cryptocurrencies. Under the new regime, businesses holding cryptocurrencies as long-term assets will be exempt from taxes on unrealized gains. This decision, spearheaded by Japan’s Liberal Democratic Party and its coalition partner Komeito, aims to align the country’s fiscal approach with the evolving digital asset landscape.

Currently, Japanese companies are obligated to pay corporate taxes on the value of their crypto holdings at the end of each fiscal year. The proposed change, slated for inclusion in the fiscal 2024 tax reform plan, represents a strategic effort to stimulate liquidity in the cryptocurrency market. This move is in line with efforts by other Asian regions to establish themselves as cryptocurrency hubs.

The policymakers are also reviewing taxation policies for foreign visitors making crypto purchases in Japan. The specifics of this proposal are yet to be unveiled, but it indicates a broader initiative to integrate cryptocurrency into Japan’s economic framework.

Japan’s first Yen-pegged digital currency

In a parallel development, Japan is gearing up to launch its first yen-pegged digital currency to facilitate clean energy settlements. GMO Aozora Net Bank, a prominent Japanese internet bank, is set to issue this digital currency, identified as DCJPY, by July 2024. Backed by bank deposits, DCJPY will utilize a blockchain network developed by DeCurret, a licensed cryptocurrency exchange in Japan acquired by Amber Group in early 2021.

The introduction of DCJPY marks a significant milestone in Japan’s digital economy. Internet Initiative Japan, a leading telecommunications firm, will initially employ this digital currency to settle clean energy certificates. Discussions are also underway with other major Japanese corporations, including Mitsubishi UFJ Financial Group Inc., to explore potential applications of this technology.

Impact on Japan’s economic landscape

These developments represent a pivotal moment for Japan in digital finance. The adjustment in crypto taxation policy signals an acknowledgment of the growing significance of digital assets and a desire to foster a favorable environment for their growth. Japan is positioning itself as a forward-thinking player in the global cryptocurrency market by exempting long-term crypto holdings from the unrealized gains tax.

The launch of DCJPY further underscores Japan’s commitment to integrating digital currencies into its financial ecosystem. This initiative demonstrates Japan’s prowess in digital innovation and aligns with its broader environmental goals, particularly in promoting clean energy.

As Japan continues to adapt its fiscal and technological frameworks to the evolving digital landscape, these initiatives are expected to contribute significantly to the country’s economic dynamism. With a keen eye on the future, Japan is steadily cementing its position as a leader in the global digital economy, embracing the possibilities and challenges of the rapidly evolving world of cryptocurrencies and digital currencies.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Mutuma Maxwell

Maxwell especially enjoys penning pieces about blockchain and cryptocurrency. He started his venture into blogging in 2020, later focusing on the world of cryptocurrencies. His life's work is to introduce the concept of decentralization to people worldwide.

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