Japan’s Strict Taxes on Crypto Firms Make Them Leave Country
Japanese cryptocurrency companies have urged the authorities to change their tax policies, and some say these policies deport them. However, recent government policy announcements indicate that the government ignores its appeals.
On December 10, the Japanese ruling coalition approved a tax plan for the fiscal year 2022. This plan continues to treat token listings as taxable. Once the token is on an active market, the issuer can pay taxes even if it doesn’t sell.
If a project that lists some of its tokens on an exchange and keeps the remaining tokens in its treasury, it must also pay taxes on the assets it holds if its market value rises.
What happens if the core team can’t afford to pay taxes, as is often the case with early-stage startups? It will have to sell more tokens to the open market. However, this adversely affects the token price and the overall health and trajectory of the project.
According to Kenji Yanagisawa, the tax rate for token issuers is about 35%.
If the token issuer airdrops tokens, both the issuer and receiver will have to pay the tax.
Japan’s Current Tax System Will Not Change for At Least One Year
Japan’s corporate tax policy has prompted the founders of crypto projects to dissolve their entities in Japan and move to other countries.
Mai Fujimoto, the founder of the blockchain and cryptocurrency consulting firm Gracone, said eight projects moved out of Japan.
Astar Network is a multi-chain decentralized application (Dapp) center, and its founder is Sota Watanabe. Watanabe also believes that unclear regulation and high taxes are a severe problem in Japan.
He said that it would be charged once a token is listed on an active market. However, there is no clear definition of an active market.
He said that listing on top exchanges like Binance almost undoubtedly constitutes an active market. Still, it is unclear whether listing on decentralized exchanges with low trading volume counts as one.
Baidu Plans to Launch a Metaverse-Based App Called Xirang
Chinese technology giant Baidu does not want to be excluded from the Yuan Festival competition. The company has officially started internal testing its first metaverse-based application called XiRang.
The company strives to gain a foothold in the rapidly growing field of Metaverse. So, the testing is now open to designated user groups. The company further pointed out that the application will be available to all users during the creation of Baidu, its annual flagship developer conference on Monday 27th.
This conference is China’s first Yuanjie meeting and will occur through the Yuanjie platform.
The Metaverse application called “land of hope” will accommodate up to 100,000 people in a 3D virtual environment. During the three-day event, participants will interact with others. They will explore the iconic features of Shaolin Temple and Sanxingdui Museum. At the same time, there is the main forum and 20 sub-forums under the Yuan Festival Conference.
Baidu aims to showcase its technological advancements and applications in artificial intelligence, intelligent transportation, biological computing, quantum computing, and autonomous driving. Organizers have invited developers and creators from all over the world to the conference.
Baidu, vice president and head of Xirang Ma Jie, said that creating a truly immersive real-time experience, supporting visual effects and interactive sounds are the three significant shortcomings that may hinder the development of Metaverse.
Baidu is seeking to build infrastructure through technical support in artificial intelligence and cloud computing to provide power for Metaverse.
Only 1.3 Bitcoin Is Left To Circulate On Crypto Wallets
The supply of Bitcoin (BTC) is drying up to a low point not seen in many years. In a recent tweet from CryptoRank, cryptocurrency exchanges hold 6.3% of the total Bitcoin supply or 1.3 million Bitcoins.
The decrease in supply is nothing new. Since the Bitcoin halving in 2020, the BTC block reward has been cut into two parts. Meanwhile, the supply has shown a downward trend. The availability of BTC on the exchange followed closely behind, slowly declining in the past year.
In October 2020, before the 2020 Christmas all-time high, exchange wallets accounted for 9.5% of BTC supply. In comparison, the July data accounted for 7.3%. The December figure of 6.3% is the lowest record in 2021.
Coinbase’s BTC Wallet Dominance Is Also Declining
The total amount of BTCs hosted by US exchanges in the past surpasses the sum of all other exchanges. Its dominance dropped from 50.52% to 40.65% in the past year.
The news was released after a series of positive price indicators coincided with Bitcoin’s price increase. First, since the BTC supply has changed from a “liquid” state to a “non-liquid” state, there are now 100,000 BTC per month, so the illiquid BTC supply has ended in winter.
Simply, the amount of BTC locked in the cold storage exceeds the mined amount.
On-chain analytics company Glassnode shared the further good news about trading behavior.
The 7-day moving average of BTC exchange inflows has just reached a 5-month low of 978.452 BTC and has been on a downward trend. As the number of BTC sent to exchanges decreases, exchange supply shortages may continue.
Additionally, many retail investors and some companies store their BTC on exchanges, indicating that “illiquidity” may be lower. Some BTC owners will give custody of their keys to the exchange instead of putting their BTC offline in the cold storage.
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