NTT Docomo’s $4 Billion Commitment and Financial Institutions’ Plans for Stablecoins Indicate Shift in Japan’s Web3 Landscape
The Web3 project team of Japan’s ruling Liberal Democratic Party has released a white paper outlining strategies to bolster the country’s Web3 sector, which has become integral to the national agenda under Prime Minister Fumio Kishida. The paper suggests implementing additional tax reforms, establishing clearer accounting frameworks, and enacting a DAO law. It emphasizes that Japan should take a leadership role at this year’s Group of Seven (G7) summit, where cryptocurrency discussions are expected to occur.
While numerous governments are currently focused on regulatory measures to safeguard consumers, Japan is advancing towards a more accommodating environment for cryptocurrency, prompted by firms relocating to other countries due to excessive tax implications. The Web3 project team is bypassing traditional bureaucratic barriers to develop regulatory proposals covering a spectrum from non-fungible tokens (NFTs) to decentralized autonomous organizations (DAOs). “The cryptocurrency market has primarily been driven by early adopters, but we anticipate a transition to mass adoption moving forward,” stated Akihisa Shiozaki, the Secretary-General of the party’s Web3 project team, in an interview with CoinDesk Japan. He highlighted that significant players in Japan are making their market entry.
NTT Docomo, a prominent Japanese mobile operator, has committed to invest as much as 600 billion yen ($4 billion) into Web3 infrastructure, alongside major financial entities that are planning to issue stablecoins. The white paper advocates for further modifications to tax regulations, pointing out that one notable exemption for token issuers has already been sanctioned. These changes involve tax exclusions for businesses holding tokens issued by other companies that will not be traded in the short term. It recommends permitting self-assessments to enable investors to carry forward losses for three years while ensuring that crypto assets are taxed only when converted to fiat currency.
The document identifies the absence of accounting standards as a pressing concern, as Web3 companies struggle to find qualified auditors. It urges ministries and agencies to assist the Japanese Institute of Certified Public Accountants in creating guidelines. Additionally, it calls for the establishment of a DAO law reflective of Japan’s godo kaisha (a business type akin to a limited liability company) and suggests amendments to the Companies Act and Financial Instruments and Exchange Act.
Regarding NFTs, the white paper recommends fostering public-private partnerships to create guidelines for legal frameworks governing business models in fantasy sports services. It also advises collaboration between public and private sectors to clarify data and NFT rights and explore ways for content creators to lawfully license NFTs. Although major corporations in Japan are showing enthusiasm for the Web3 sector, the report indicates that regulatory clarity for banks and insurance companies looking to enter the space is still lacking and calls for the development of guidelines.
The newly released white paper underscores the necessity of preparing the ecosystem for stablecoin registration and establishing a self-regulatory body. It also refers to plans for yen-backed stablecoins. Japan laid the groundwork for stablecoin regulation last year. The paper notes that the evaluation process for tokens already in circulation is being expedited, yet the review of new tokens from foreign issuers remains sluggish. It recommends enhancing transparency in procedures to facilitate issuers in providing vital information needed for assessment.
According to the white paper, a Web3 minister should be appointed to oversee policy promotion and international collaboration. The document specifies that Japan’s Digital Agency will establish a relevant consultation desk for local authorities and businesses. It also advocates for the issuance of crypto visas to attract skilled professionals and the expansion of the startup visa program.
Japan’s Web3 Revolution has picked up steam with the endorsement of a white paper focused on fostering industry expansion in the nation. The recommendations within this document propose substantial reforms to tax regulation, clearer accounting standards, and the introduction of a DAO law. Japan is committed to creating a welcoming atmosphere for cryptocurrency, with key players like NTT Docomo and major financial institutions already investing heavily in the Web3 sector.
The white paper also highlights the critical need for a self-regulatory organization and the preparation of the landscape for stablecoin registration, while proposing collaborations between public and private sectors to establish guidelines for lawful business endeavors centered on fantasy sports services and NFTs. With the outlined changes and initiatives, Japan aims to position itself as a leader in the Web3 landscape and a benchmark for responsible innovation.
As the industry evolves, it will be intriguing to observe how Japan’s initiatives to cultivate a favorable climate for cryptocurrency and Web3 advancement will influence the global arena.
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