Japanese lawmakers are calling for a “redefinition” of cryptocurrency and its regulation in the country, suggesting that further reforms may be on the horizon in Tokyo. Seiji Kihara, head of the ruling Liberal Democratic Party’s blockchain promotion group, and Masaaki Taira, chair of the party’s web3 adoption unit, made these comments. They both agreed that legal terms related to cryptocurrencies, including Bitcoin, need to be redefined. Kihara pointed out that while tokens are currently considered “assets” in the investment products space, they are legally defined as a substitute for currency or money in Japan, which he considers a contradiction. Taira added that because crypto plays a role similar to that of gold, the terminology needs to be redefined to allow financial institutions to handle coins more normally. Currently, Japanese crypto exchanges and securities companies are governed by separate laws, and the tax system follows suit. Critics argue that Japan’s crypto tax system is overly restrictive and has led many blockchain startups to leave the country. The government has agreed to reform the tax rules for corporations, but campaigners are pushing for reforms for individuals as well. The LDP, which has been in power since 1965, has indicated its intention to reform individual crypto tax rules. Taira has previously called for the creation of a “minister of web3” to promote blockchain-related growth in Japan.
