The Japanese Financial Services Agency reforms crypto payment regulations, optimizing the handling process of crypto assets and taxation.

The Financial Services Agency (FSA) of Japan announced on September 24th that it will amend regulations related to cryptocurrency payments, and has designed a process to optimize how Japanese companies handle crypto assets. The aim is to reduce the burden on businesses and alleviate issues such as talent and business outflow.

Establishment of Special Team to Continuously Revise Cryptocurrency Regulations

According to a report, with the expansion of the cryptocurrency market in recent years, issues regarding the regulation of cryptocurrency exchanges have emerged, especially in the fintech sector. Japan has already established regulations focusing on the security of applying emerging technologies in financial services. The Financial Services Agency will establish a special team for the "Funds Settlement Act" to research and revise cryptocurrency-related regulations and policies continuously.

Heavy Taxation Leading to Talent Drain, Tax System Needs to Keep Up with the Times

At the previous WebX 2024 conference, members of the Japanese Liberal Democratic Party's Web3 project team stated, "Japan's tax system has not kept up with the times. Even if entrepreneurs are willing to start businesses domestically, tax issues have caused many talented individuals and businesses to choose to develop overseas, and this phenomenon is becoming more apparent."

Progress in Tax Reform, Challenges Remain in Non-Mainstream Token Auditing

They added that there has been some progress in tax reform, with some companies successfully resolving real-time valuation tax issues related to issuing their own tokens. The following year, another company faced a similar issue and resolved it properly. However, there are still some challenges that require effort, especially when companies hold "non-mainstream tokens," making it difficult for accounting firms to conduct audits, particularly in cases where startups issue tokens.

In conclusion, the Financial Services Agency of Japan is actively revising the "Funds Settlement Act" to reduce tax burdens and stimulate gaming companies to enter the cryptocurrency gaming market. However, tax system issues continue to be a significant challenge hindering talent and businesses from staying in the country, especially the need for further improvement in auditing non-mainstream tokens.