The Hub Of Video Gaming Japan Faces Crypto Hostility

Nintendo, Bandai Namco, Square Enix, and Sega are among the world’s most renowned and well-known gaming businesses headquartered in Japan.

However, a few Japanese business owners in the gaming sector and casino news have expressed concern for the future of Japan’s renowned and beloved industry.

From legislation to taxation, Japan has opposed cryptocurrency gambling. This action damages the country’s standing as a global gaming leader.

A Government in Japan Limited Video Game Time. This Boy Is Fighting Back. -  The New York Times

Tough Rules Set For Crypto

According to local news sources, the Japanese government has passed a cabinet decision to prohibit using cryptocurrencies for money laundering.

Bittimes reported last Friday over the weekend that Japan’s cabinet approved modifications to the Foreign Exchange Act and the Act on Preventing the Transfer of Criminal Proceeds.

The cabinet’s decision followed Nikkei’s report as Nikkei reported in September that the government wanted to alter the Act on Prevention of Transfer of Criminal Proceeds to focus on remittances to prevent criminals from utilizing cryptocurrency exchanges to launder money. 

New regulations oblige bitcoin exchanges to reveal client information such as names and addresses when transferring funds between platforms. Companies that violate these regulations may be punished.

However, Japan intends to further relax cryptocurrency regulations by making it simpler to list virtual coins. This will increase the country’s appeal to Binance and other digital asset exchanges outside Japan.

Unless the tokens are new to Japan’s market, the group that supervises cryptocurrency exchanges proposes to allow them to list coins without undergoing its demanding screening process, according to papers seen by Bloomberg News.

According to “personal ideas” by Vice Chairman Genki Oda, the Japan Virtual and Crypto Assets Exchange Association may halt pre-screenings for new coins entering the nation and tokens issued through initial coin or exchange offers by March 2024.

In contrast to a few years ago, when laws held things down, Japan is becoming more serious about revitalizing its cryptocurrency industry. 

The world’s largest digital asset exchange, Binance, is attempting to obtain a license to conduct business in Japan four years after departing. This is partially due to the shift in the stance of the government.

This is consistent with Prime Minister Fumio Kishida’s revised economic policy, which aims to make Web3 development “one of the pillars of economic revitalization.” This will aid the expansion of enterprises in crypto, blockchain, and other decentralized industries.

The Effects?

GameFi is a novel business concept with significant potential. However, a closer inspection reveals that not many Japanese companies are shaping the GameFi industry into what it will be in a few to ten years. If this does not change quickly, the entire sector could suffer.

The crypto and IT industries are two of the most intriguing and rapidly expanding aspects of modern technology, but in Japan, they are hampered by obstacles such as taxation and rigorous screening.

We know that Nintendo and Sega, two of the most prominent video game companies, have been headquartered in Japan for decades. Their achievements include Super Mario, Sonic the Hedgehog, the Sega Mega Drive, and the Game Boy.

But for the industry to be at the top of its game, it must adapt to the changing circumstances and not remain stagnant in its initial state.

The gaming business has always had the technology to support its extraordinary potential. But for that to occur, it must be able to adapt to new and impending changes. If it cannot, it will become slow and stagnant.

No one knows the origin of the country’s dislike of cryptocurrencies or why it persists despite the “boom” of non-fungible tokens (NFTs) and cryptocurrencies in 2021, which caused officials in the U.S. and Europe to change their minds about how they previously viewed the field and begin drafting laws for it.

In Japan, no law specifies how crypto assets should be accounted for, and no auditors are interested in examining them. Due to the Financial Agency’s stringent listing requirements, getting a coin listed in Japan can be difficult and tedious.

Waiting six months for a token to be examined is, on the other hand, extremely disheartening for any entrepreneur with a great concept.

Also, there are taxes. Token issuers in Japan are taxed on their unrealized assets at the end of the fiscal year, even if they lack sufficient fiat currency to pay the enormous taxes. 

In addition, non-crypto stock earnings are taxed at a flat rate of 20%, whereas crypto earnings are taxed at a high rate of 55%, a difference of 35 percentage points.