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Japan’s pursuit of becoming a crypto and Web3 juggernaut has caught the attention of South Korean analysts, sparking a debate about whether Seoul can outpace Tokyo in this burgeoning domain.
South Korean crypto companies are closely monitoring Japan’s proactive policies aimed at nurturing Web3 technologies. These policies have the potential to transform Japan into a “crypto and Web3 El Dorado,” a prospect that has raised eyebrows in South Korea.
While South Korea is contemplating tighter regulations in response to recent controversies in the crypto sector, Tokyo is taking a different route. Japan’s crypto regulations, among the strictest globally, are showing signs of relaxation under Prime Minister Fumio Kishida’s leadership.
Japanese self-regulating crypto exchange bodies have begun easing their stringent token listing criteria. Furthermore, the Japanese government is revamping crypto tax laws, which critics argue have driven Japanese companies away.
The South Korean newspaper Chosun Ilbo commented, “While South Korea, once regarded as a virtual asset powerhouse, is grappling with government regulations and a decline in investor activity, Japan is on the ascent, with the government taking proactive measures and easing regulations.”
Notably, Prime Minister Kishida delivered a video address at the inaugural WebX conference in Japan, hosted by CoinPost, the country’s largest crypto-focused media outlet. High-ranking government officials and industry leaders also participated in the event.
Japan’s Policy Roots
Kishida unveiled his Web3 ambitions in a meeting with investors in London in May 2022. Subsequently, he made several Web3 pledges, with a “basic policies” framework expected in November 2022. The Liberal Democratic Party (LDP) formed Web3 and NFT taskforces, advocating for tax reform in December of the same year.
Chosun Ilbo traced Japan’s Web3 policy roots back to a 2021 cabinet meeting, where ministers resolved to provide extensive support to Web3 firms, fostering startups and advancing digital transformation. Japan has expedited tax reforms and legislation related to stablecoin issuance, enabling banks and trust operators to legally issue stablecoins in June.
Japan’s Growing Influence
In contrast, South Korean firms are still awaiting approval for stablecoin operations, prompting overseas crypto companies to flock to Japan. Notable entrants include Binance, the crypto exchange giant, and South Korean gaming titan Netmarble.
Despite Japan’s proactive stance, South Korean experts argue that their country has a competitive edge in cultural content, thanks to the global popularity of K-pop and Korean dramas.
They believe that if the South Korean government accelerates legislation, support, and deregulation, they can regain a leadership position in the Web3 sector.
Recent announcements by Japanese companies like Mizuno and Casio about their foray into the Web3 and NFT landscapes underscore Japan’s growing influence in this transformative realm.