[NEWS] LDP web3PT compiles and publishes "web3 White Paper"

The Liberal Democratic Party's Digital Society Promotion Headquarters web3PT (Project Team) compiled the "web3 White Paper (Draft)" on the 6th. On the same day, web3PT chairperson Masaaki Taira, a member of the House of Representatives, released the web3 White Paper.

The white paper, entitled "Towards an era when everyone can utilize digital assets," touches on issues that need to be discussed in promoting Web 3.0 and the progress of measures that have already been announced.

The white paper also points out that "this country was once on the verge of becoming the center of web3," and states that Japan, which led the global crypto industry until the mid-2010s, has become a country that entrepreneurs both at home and abroad shy away from.

Last year, the cryptocurrency market fell into a "crypto winter" due to the deterioration of the market, and various troubles occurred, including the collapse of FTX, which increased the need for regulations with customer protection in mind worldwide.

However, the impact was limited in Japan, as the country had already taken the lead in terms of regulations, such as requiring the segregation of assets held by customers. In its white paper, CryptoWinter points out that "this has once again shed light on the resilience of Japan's web3 environment."

The newly released white paper lists the following as "issues that need to be addressed immediately in order to promote web3."

• Japan's contribution to the formulation of international rules
• Tax reform
• Ensuring opportunities for accounting audits of cryptocurrency issuing companies
• DAO
• Examination, issuance, and distribution of various tokens
• Consumer protection
• Financial institutions entering web3
• NFT business
• Diversification of investment vehicles and schemes

In particular, in the tax reform section, "Tax reform that does not hinder fundraising through tokens," it is proposed that, on the premise of supporting startups and the development of web3 businesses, even if tokens issued by other companies are held, measures should be taken to exclude them from the subject of end-of-period market value taxation if they are not for short-term trading purposes, and to value them at acquisition cost.

It is emphasized that there are several options for specific exclusion methods, and that they should definitely be realized this year.

Furthermore, in the "Review of income tax on crypto assets held by individuals," it is proposed that in addition to subjecting profits and losses related to transactions to separate self-declaration taxation, it should be possible to allow carryover deductions from income (for three years from the following year), and that crypto asset derivative transactions should also be subject to separate self-declaration taxation.

In addition, it is also stated that tax should not be imposed when crypto assets are exchanged with each other, but should be taxed together when the crypto assets held are exchanged for legal tender.

In the white paper, in the section "Issues that should be started and deepened in anticipation of further development of web3," the following is listed.

• Private law treatment of digital assets
• Support for overseas expansion of web3 content
• web3 business license
• Safe and secure usage environment
• Unhosted wallet
• Support for local governments
• Anti-money laundering (AML) and counter-terrorist financing (CFT) measures
• Investment DAO
• Metaverse

Regarding business licenses, the report recommended that financial authorities should consider the perspectives they should take when determining whether businesses using crypto assets qualify as such, and that they should increase awareness of Fintech Support Desks. It also recommended that, if necessary, they should consider making regulations more flexible, including creating new industry categories.

The report also pointed out that, in order to lower the psychological hurdles for ordinary businesses and consumers to participate in the Web 3.0 space, businesses should provide a safe and secure trading environment, provide information and raise awareness for consumers, and strengthen crackdowns on cybercrime. It also recommended that efforts are needed to prevent development from stagnation.

Reference: web3 white paper summary、web3 White Paper (draft)
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