While more and more markets are crypto Exchange Traded Funds (ETFs) just doesn’t seem to work in Japan. A strict tax policy and cautious regulation in Japan stand in the way of further acceptance. What else can we expect?
Reluctant regulators
Japanese regulators are quickly pulling back when it comes to approving crypto-based ETFs. This is notable as global markets push to bring more ETFs to market.
This shift is clearly visible in institutional and private investments in new crypto ETF products, as a recent example from October 21 shows. At that time, $329 million was invested in BlackRock’s iShares Bitcoin Trust. It shows the immense demand from investors to gain access in this way Bitcoin (BTC).
Despite increasing attention from domestic stakeholders and collaborations seeking to bring digital assets to market, Japanese tax and regulatory policies remain a barrier to adoption. So are the Japanese Ministry of Finance and the Financial Services Agency (FSA) is cautious about the volatility and risks associated with crypto ETFs.
Tax and regulatory concerns
In addition, Japanese tax policy is an important issue. The profits from crypto investments are considered as miscellaneous income and are subject to a tax rate of up to 55 percent. Traditional ETFs in the country have a lower tax rate of 20 percent on capital gains. The difference remains a major problem in Japan.
Japanese Democratic Party leader Yuichiro Tamaki hit on October 20 that voters should support his party if they believe that Crypto assets should be taxed separately at 20 percent. However, this party has relatively few seats in the Japanese parliament, so the chances that he will be able to realize his plans are slim.
Japan remains enthusiastic about Bitcoin
Despite ongoing concerns about regulation and taxation in the country, Japanese companies continue to accumulate cryptos like Bitcoin. At the beginning of this month, for example, you could go to the Bitcoin News read that Japanese investment firm Metaplanet has expanded its Bitcoin holdings with a new purchase of 108.78 BTC, worth about $6.92 million.
Metaplanet, also known as “the microstrategy of Asia,” has invested significantly in Bitcoin. According to the latest data, it owns 640 BTC with a current value of about $40.5 million.
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