Marked hostility towards new and emerging Web3 technologies such as cryptocurrencies risks costing Japan its place as the gaming capital of the world.. We are getting dangerously close to the point of no return, and here’s why.
No one can be sure where the country’s antagonism toward cryptocurrency originated or why it still persists even after the 2021 non-fungible token (NFT) and cryptocurrency “boom” that took off from importantly globally and caused officials in the United States and Europe to reverse their initial antipathy to this space, eventually opening up to regulation. The White House has just published its first cryptocurrency regulatory framework in September 2022, and the European Parliament Committee followed in October 2022 by approving the Crypto Asset Markets framework., also known as MiCA, with an overwhelming vote. As the first European policy on cryptocurrencies, the controversial MiCA text represents a revolutionary step in the direction of what many consider to be the future of the financial world.
Japan, however, takes a very different stance.
we all know that Japan is home to gaming giants like Nintendo and Sega and has been for decades., with triumphs like Super Mario, Sonic the Hedgehog, the Sega Mega Drive and the Game Boy. But, to stay on top of the game (pun absolutely intended), the industry must be able to constantly and rapidly change with the times, and not be stuck where it was when it first gained recognition. Gaming is a very creative space and has always had the technology to support its extraordinary potential. But for that, you have to be able to keep up with new and evolving innovations, or you will be stuck and lethargic.
GameFi is an emerging area of interest in the industry with immense potential. But, if you look more closely, there are very few Japanese companies developing the GameFi sector into what it will surely become in a few years or a decade. And if that doesn’t change soon, the entire industry will be in jeopardy.
The worlds of cryptocurrency and technology are two of the main arenas for the exciting and rapidly evolving progress taking place in the modern age.and in Japan they are being held hostage to crucial elements like taxation and a complicated selection process.
In Japan, there is no ground to account for crypto assets properly, and none of the auditors want to audit them. Due to the strict listing rules put in place by the Financial Agency, the process of listing a currency in Japan can be confusing and frustrating to no end. But, when time is money for any entrepreneur with a bright idea, waiting six months for a token to be reviewed is unnecessarily daunting.
Also, there is taxation. In Japan, token issuers are taxed on unrealized assets at the end of the fiscal year, regardless of whether they have enough fiat currency to cover the high taxes or not.. And, while non-crypto stock gains are taxed at a flat 20% rate, crypto-related gains are subject to an exorbitant 55% tax rate, a difference of 35 points.
As Japan’s reputation falters, other countries will be waiting with open arms to embrace its brilliant minds and intrepid entrepreneurs who cannot understand why their country turned its back on them.. Europe is full of investor-friendly nations with rational regulatory systems, like the Netherlands. With the new MiCA legislation so close to being widely implemented, it is not unreasonable to wonder if other countries would be better suited to host Japan’s brain drain.
In fact, we might be seeing small improvements in the right direction. The government may be inclined to ease current onerous listing rules soon and allow the country’s $1 trillion cryptocurrency trading market to flourish a little more easily, with exchanges able to “list more than a dozen of coins in one go and without a lengthy selection process.” Y Since taking office in 2021, Japan’s Prime Minister Fumio Kishida has prioritized the development of Web3 as a means of “economic revitalization,” meaning we could witness a marked change in the way the country regulates cryptocurrencies and supports the growth of the Web3 sector as a whole.
But the hours are ticking by, and if only time will tell how Japan’s role in the gaming industry will affect the economy of its future, it’s hard to be overwhelmingly optimistic.
Shinnosuke “Shin” Murata is the founder of blockchain game developer Murasaki. He joined the Japanese conglomerate Mitsui & Co. in 2014 doing auto finance and trading in Malaysia, Venezuela and Bolivia. He left Mitsui to join a sophomore startup called Jiraffe as the company’s first sales representative, and later joined STVV, a Belgian soccer club, as its chief operating officer, helping the club create a token. community. In 2019 he founded Murasaki in the Netherlands.
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