Japan's regulatory authorities are remaining cautious about approving cryptocurrency-based exchange-traded funds (ETFs), despite global markets increasingly embracing them. This hesitation is largely due to Japan's stringent tax policies, where profits from crypto investments are taxed up to 55%, contrasting sharply with traditional ETFs that enjoy a lower capital gains tax rate of around 20%. Calls for reform have emerged from local political figures, including Yuichiro Tamaki, who advocates for a separate 20% tax rate on crypto assets and aims to bolster Japan's position in the Web3 space. Internationally, other regions such as the United States and Hong Kong have welcomed spot Bitcoin and Ether ETFs, showcasing a more progressive approach towards integrating cryptocurrency within traditional financial systems. Even amid these challenges, Japanese firms continue to accumulate significant crypto assets, demonstrating a persistent interest in the space.

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