Stake CEO: Japan Should Lower Crypto Tax

Japan should lower corporate taxes on cryptocurrencies to retain its base of entrepreneurs, one of the country’s leading crypto business people said Monday (Aug. 8).

“At least 20 or more” firms have moved abroad due to taxes, Sota Watanabe, CEO of Web3 infrastructure firm Stake Technologies Pte., told Bloomberg News.

Watanabe moved his company to Singapore two years ago and said he hopes the Japanese government will change its corporate taxes in 2023. If that can happen, he would like to move Stake back to Japan.

He added that it could take a few more years before Japan reduces income taxes for cryptocurrency gains made by individual investors.

Read more: Today in Crypto: Japanese Crypto Businesses Seek Tax Cuts

PYMNTS reported last month that crypto lobbying groups in Japan were asking the government to ease the corporate tax on crypto.

The Japan Cryptoasset Business Association and the Japan Virtual and Cryptoassets Exchange Association proposed making it cheaper for companies to issue and hold crypto tokens, and are asking the government to cease taxing paper gains on crypto holdings if companies own them for reasons other than short-term trades.

Under the currency system, profits from crypto holdings, including unrealized gains included, incurs a corporate tax of about 30%, which can make it difficult for companies to hold onto digital coins once they’ve been issued.

Learn more: Japan Passes Legal Framework for Stablecoins

In June, Japan passed legislation that effectively defines stablecoins as digital currencies, thus becoming one of the first major world economies to create a legal framework for stablecoins.

The legislation says stablecoins must be linked to the yen or another legal tender and guarantee that holders can redeem them at face value. It also says stablecoins can only be issued by licensed banks, registered money transfer agents, and trust companies.

The new legal framework is slated to take effect next year. Japan’s Financial Services Agency said its regulations governing stablecoin issuers are due to be released in the coming months.