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Japan's Finance Minister Balks at Changing Crypto Tax Rules

Japan’s top financial official is cautious about the idea of his nation changing how it taxes gains from cryptocurrencies.

During a meeting with the budget committee of the Upper House on June 25, Senator Kenji Fukimaki asked whether Japan’s tax policy on cryptocurrency profits could be changed from its current “miscellaneous income” classification to “separate declared taxation,” Reuters reported. Taro Aso, the deputy prime minister and minister of finance, said he was cautious about making such a change.

Aso explained that, in his view, it was “doubtful” that the general public would understand such a change. He cited the “international nature” of cryptocurrency as one reason why Japanese residents might dislike a change in tax classification. The finance minister also said he was unsure about the “tax fairness” of implementing such a change.

At present, profits earned by investors in cryptocurrency can be taxed between 15 and 55 percent, due to the miscellaneous income rules, according to Bloomberg. Stock profits, which are treated more like separate declared taxes, are taxed at roughly 20 percent in the country.

While the finance official has doubts about cryptocurrency taxation, he still expressed support for blockchain technology in general, saying they have uses apart from cryptocurrencies.

Editor’s note: Statements in this article have been translated from Japanese.

Taro Aso image via Shutterstock

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‘First’ Japanese Restaurant to Accept NEM Relocates to Tokyo

A Japanese restaurant believed to be the first to accept NEM has relocated its premises to Tokyo.

According to a report from the Japan Times, St. Arnould was opened as a small restaurant with 20 seats, selling over 200 varieties of Belgium beer. It was initially located along the Hori River in Naka Ward, Nagoya.

In response to a request from a customer, the restaurant accepted XEM, the native token for the NEM platform, for a ¥1,200 pizza ($11.23) on the 28th June, 2016. Since then the restaurant has seen an influx of digital currency users keen to use their XEM tokens for actual goods.

Yousuke Sato, who opened the restaurant, said of the decision:

“I became interested in virtual currencies about five years ago and began tweeting about them. I thought it would be interesting to accept payment in a virtual currency, so I said yes.”

After operating the restaurant for eight years, Sato has now relocated to Tokyo.

Since 2016, the value of the NEM token has risen. At the end of June, 2016, one token was valued at $0.012240. Fast-forward to 2018, and the highest it has reached, so far, has been $1.91 at the start of the year, according to CoinMarketCap.

The currency has also been pushed further into the limelight, due in part because of the hack at Japanese crypto exchange Coincheck. At the end of January, hackers were able to steal $530 million worth of the NEM token, leaving hundreds of thousands of holders frozen out of their accounts.

In Sato’s opinion, though, there’s nothing wrong with the idea of digital currencies, rather that the Coincheck operators weren’t strict enough with the management of the currency, adding:

“The market for virtual currency is still young so it’s only natural that it has become a target of speculation, but I think it has potential as a currency that is not restricted by country. I think it’s too early to say what will happen to virtual currencies in the future.”

In April, Japan made changes to its legislation that legalised the use of cryptocurrencies such as bitcoin as a form of payment for actual goods. However, according to the report, even though the number of stores accepting them is increasing, the number of people using them remains low.

It’s believed that there are around one million bitcoin holders in Japan. Notably, though, Satoru Kado, a senior researcher from Mitsubishi UFJ Research and Consulting Co., Ltd. who is an expert on cryptocurrencies, explained by saying “there is little benefit in using bitcoin to make payments or send money.”