The Japanese cabinet approved a proposal by the ruling Liberal Democratic party to endtaxation of unrealized cryptocurrency gains in a move that is likely to boost the development ofthe country's Web3 industry.

The proposal, which needs to be debated in the Diet, Japan's parliament, will end corporatetaxation on the difference between the market and book values of crypto assets issued by othercompanies. lf it became law, the Dec. 22 approval would end a discrepancy in the treatment ofthird-party issued assets and those issued by holders, who are not taxed on mark-to-marketvalues.

Prime Minister Fumio Kishida's government has been considering submissions from industryassociations such as the Japan Crypto Asset Business Association (JCBA) and JapanBlockchain Association on how best to encourage the industry's development, which it sees asa pillar of economic reform. Having politicians drive policy development is a departure fromtraditional practice in a country where that role is usually taken by the bureaucracy.

Web3 companies have been moving overseas because they became liable for tax even beforemaking profits from their activities, said Gaku Saito, chairman of the JCBA's tax reviewcommittee, in an interview. Companies were having to pay tax on unrealized gains, forcingthem to sell their assets and stifling business development.

（Source: CoinDesk)