Japan’s Web3 Ecosystem in Action: From Policy to Practice
The web3 industry is gaining momentum in Japan, driven by coordinated efforts between the government and enterprises. The recent WebX event highlighted Japan’s proactive stance, with key announcements signaling a strong push toward fostering an environment conducive to web3 innovations. Our previous blog post introduced Japan’s web3 market, and this piece explores the latest updates, including the government’s stance, the industry’s movement, and collaborative efforts surrounding web3 and the digital asset field.
Japan’s Government Support for Web3
During the WebX event in August, Japanese Prime Minister Fumio Kishida delivered a speech via video underscoring the government’s commitment to creating a supportive environment for web3 development. The Prime Minister mentioned the measures for tax reforms and legal amendments that have been implemented to stimulate the web3 sector, a critical component of the“new capitalism” economic policy. web3 and blockchain technologies are highlighted as essential tools for addressing social challenges in Japan. The Prime Minister connected these innovations to the broader goal of driving economic growth through technological advancement.
Kishida’s administration has already made strides in this direction by revising tax regimes to exclude corporations from paying taxes on unrealized crypto gains when long-term assets are held. This move is expected to encourage more companies to invest in digital assets without the immediate burden of tax liabilities. The government’s continued focus will be on three key areas: leveraging tokens related to web3, facilitating smoother payment systems, and revitalizing the content industry through blockchain technologies.
Earlier in July, before the Prime Minister’s speech, the Japan Blockchain Association (JBA) submitted a tax reform petition advocating for more comprehensive changes. The petition outlines specific requests, including introducing a separate tax on crypto profits at a flat rate of 20%, allowing loss forward for up to three years, and eliminating the tax on crypto-to-crypto exchanges. These reforms are crucial for reducing crypto transactions’ complexity and financial burden, thereby fostering a more robust web3 ecosystem in Japan.
Growing Interest in the Web3 Industry
Japan’s web3 industry is evolving rapidly, with significant interest and activity across various sectors. According to a recent survey conducted by Nomura Holdings and Laser Digital, institutional investors in Japan are increasingly looking at digital assets as a viable investment class. The survey, which included over 500 investment managers, revealed that more than half of the respondents intend to invest in crypto assets within the next three years. Also, the survey suggested that as Japan’s regulatory framework becomes more supportive, barriers such as counterparty risk and high volatility are expected to diminish, which could enhance further institutional participation in the web3 space.
A report from Bitget provided further insights into the Japanese crypto market. It outlined Japan’s standing as one of the top 20 largest crypto markets globally, with a steady increase in adoption rates. The report also highlighted that Japan’s unique cultural and artistic heritage is a strong foundation for the growth of the NFT market. The country’s robust educational and innovative landscape has contributed to a high interest in blockchain gaming and NFTs, which are likely to see continued growth.
In our previous blog post, we discussed the Japanese government’s practice in supporting the content industry, including the NFT market.
Read the article: https://medium.com/gmo-z-com-trust-company/japans-pioneering-path-in-web3-and-digital-finance-60300560dcd1
Cross-Industry Participation and Collaborative Opportunities
Japan’s web3 initiatives are not confined to the tech or gaming industries. A diverse range of sectors, including telecommunications and automotive, are exploring the potential of blockchain technology.
Leading telecom companies like KDDI and NTT Docomo have launched innovative web3 projects. For instance, KDDI provides its unique web3 wallet service, αU wallet, which is part of a larger ecosystem that includes a metaverse space and an NFT marketplace.
NTT Docomo, through its subsidiary NTT Digital, has introduced a web3 wallet that allows users to manage NFTs and cryptocurrencies across multiple blockchains.
The automotive industry in Japan is also embracing web3 innovations. Major players such as Toyota and Nissan are actively exploring the use of blockchain to enhance operational efficiency and customer engagement. Toyota has implemented blockchain technology for performance tracking and has organized events where visitors can collect NFTs.
In recent years, Nissan has also been developing an NFT marketplace and exploring digital automotive solutions, indicating an ongoing trend of blockchain adoption across various industries.
Stablecoins in the Web3 Ecosystem
As Japan’s web3 ecosystem continues to develop across various industries, stablecoins could become increasingly important in supporting the diverse applications of blockchain technology that we’ve discussed.
In Japan, stablecoins must adhere to regulatory guidelines, such as issuance restricted to banks, fund transfer service providers, and trust banks. Each category of issuer is subject to specific requirements to ensure security and redemption reliability. The regulations are designed to protect consumers and ensure the stability of the financial ecosystem.
With these safeguards in place, stablecoins issued in Japan offer a secure and reliable option for integrating into the country’s expanding web3 infrastructure. Japan’s supportive stance toward developing domestic stablecoins aligns with its broader ambition to foster digital innovation and create a compliant, robust financial ecosystem.
Although domestic stablecoins in Japan are still in the early stages of development, many startups and leading conglomerates have already begun exploring and collaborating in this field. Stablecoins will be essential elements in enabling cross-industry blockchain solutions, facilitating secure, real-time payments, and bridging traditional finance with decentralized platforms.
About GMO-Z.com Trust Company
GMO Trust connects traditional finance and blockchain technology for everyone. We issue GYEN, the world’s first regulated Japanese Yen stablecoin, and ZUSD, our trusted U.S. Dollar stablecoin. Visit our website to learn more.
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