Ripple Exec: Clear Regs Helped Japanese Market Withstand Crypto Winter

Chinese tech firm pours $15 million into Bitcoin fundLinekong Interactive, a Beijing-based gaming and film production company listed on the Stock Exchange of Hong Kong (HKEX), has made a strategic move by earmarking $15 million for investment in projects designed to build on the Bitcoin network.Photo by Dmytro Demidko on UnsplashThe ‘BTC Next’ fundWang Fang, the founder of Linekong, took to X (formerly Twitter) on Wednesday to announce the establishment of the “BTC Next” fund. The fund’s primary goal is to fast-track the development of emerging projects within the Bitcoin ecosystem, spanning a wide range of areas, including asset issuance protocols, trading markets, expansion initiatives, virtual machines, NFT’s real-world asset (RWA) and GameFi.As part of its initial efforts, Linekong Interactive plans to actively engage in research and investment activities within the Bitcoin network’s ecological assets. The firm will also make its investment portfolios publicly available, enabling transparent visibility into its chosen projects within the Bitcoin ecosystem.Building on BitcoinThe idea of building out Web3 offerings on the Bitcoin network is one that has attracted considerable debate in recent years. Traditionally, Bitcoin has been recognized for its limited programmability in comparison to newer blockchains like Ethereum.Many see that as a feature and benefit. For the most part, Bitcoin has remained largely unchanged since its inception in 2008. A myriad of alternative blockchain projects started to emerge due to the frustrations of developers in wanting to have greater programmability options.However, the past year has seen significant developments within the Bitcoin ecosystem, thanks to the introduction of novel data storage methods known as Ordinals, Inscriptions and BRC-20 Bitcoin tokens modeled on Ethereum’s ERC-20 standard.Growing momentumIn May, Singapore’s OmniBOLT, a project that develops solutions on Bitcoin’s layer-2 network environment, outlined that it will support BRC-20 tokens on Lightning Network. In the same month, crypto exchange OKX announced its support for Bitcoin Ordinals and BRC-20 tokens.Established in 2007 as an online gaming company in Beijing, Linekong Interactive made its debut on the Hong Kong Stock Exchange in 2014. Wang Fang, prior to founding Linekong, served as the Vice President of Software Development at Kingsoft Software, a prominent Chinese information technology conglomerate.In 2018, Wang Fang stepped down as CEO of Linekong to dedicate his focus to blockchain technology. During this period, he initiated multiple projects implicating NFTs, DeFi and Bitcoin mining. In 2022, following an invitation from Linekong’s board of directors, he returned as CEO with the objective of achieving a more seamless integration of Linekong products with the emerging world of Web3.One community member provided a nuanced take on why there has been less development on Bitcoin on X today, stating:“It turns out you can actually do a lot of cool things within the constraints of #bitcoin’s code, but VCs [venture capitalists] weren’t interested in funding these things because they couldn’t cash out on the sale of unregistered security tokens. Fiat incentives at work.”Linekong Interactive’s $15 million investment in the Bitcoin ecosystem reflects a growing trend of interest in expanding the capabilities and applications of the Bitcoin network in spite of the incentives that venture capital firms may have followed in the overarching crypto space in the past.

Yuichiro Tamaki, leader of Japan’s Democratic Party for the People (DPP), has outlined that if elected the party will introduce a crypto tax plan that will bring about the lowering of taxation on crypto gains to 20%. Tamaki’s comments come ahead of the Asian nation's elections, which are due to be held on Oct. 27. Taking to the X social media platform on Oct. 19, Tamaki wrote: “If you think crypto assets should be taxed separately at 20% instead of treated as miscellaneous income, please vote for the Democratic Party for the People. There will be no tax when exchanging crypto assets with other crypto assets.”Photo by Liger Pham on PexelsCrypto taxation reformThe DPP leader added that he would be appreciative of people spreading the word and letting the broader Japanese public know about this commitment that is being made in respect of crypto taxation reform. The reduction to 20% would bring the treatment of crypto in line with that of the stock market in Japan, where gains are already taxed at the 20% tax rate. The DPP leader included a graphic within his X post that provided further detail. It outlined that a loss carry-forward deduction could be applied by the taxpayer within a three-year timeframe.  A tax exemption would apply when it comes to the exchange of crypto assets. The DPP is also in favor of increasing the permitted leverage multiple from 2x to 10x relative to crypto trading. Finally, the party supports the introduction of spot crypto exchange-traded funds (ETFs) in Japan. Focusing on developing Web3In response to an X user, Tamaki claimed that the DPP would consider a reduced taxation policy to be inclusive of other financial income in the future. However, for right now, the DPP leader said that the focus was on making Japan “a strong nation in the Web3 business.” Another Japanese crypto community member suggested that the proposed tax cut would lead to an increase in tax revenues, based upon the assertion that many people don’t file tax returns simply because tax calculations are too difficult right now. While the plan is positive for Japan’s crypto community, the DPP is unlikely to be in a position to implement such a plan. The party currently holds just seven of the 465 seats in the National Diet, the Asian nation’s House of Representatives.  Tax reform guidelinesCurrently, the applicable tax rate applied to crypto revenues can reach as high as 55% in Japan. At the end of August Japan’s Financial Services Agency (FSA) unveiled new tax reform guidelines for 2025. One component of those proposals was the suggestion that the crypto tax rate should be reduced to 20%. With that, if Tamaki’s DPP can’t influence matters, the regulator’s proposals may be of sufficient weight to have the matter addressed. The approach taken to the taxation of crypto in various jurisdictions is having a bearing in terms of the competitiveness of those locations relative to the development and further roll-out of Web3 technologies. Earlier this month, the United Arab Emirates took a positive step forward by exempting crypto from value-added tax (VAT). Meanwhile, in Indonesia the local regulator is moving towards a re-evaluation of what is considered to be a harsh taxation policy relative to crypto. 

Thai Central Bank Collaborates With Singapore’s 2C2P on CBDC PilotThe Bank of Thailand is set to commence a pilot project for a retail central bank digital currency (CBDC) within a regulatory sandbox later this month.Three participating fintech firmsThat’s according to local media, with reports suggesting that three payment providers will participate in the project, which is expected to involve up to 10,000 users and run until August.The scheme will involve two Thai banks, Bank of Ayudhya (Krungsri), Thailand’s fifth largest bank, and Siam Commercial Bank. Singapore-based payments service provider 2C2P will also collaborate with the Thai central bank on the CBDC initiative. 2C2P is a global payments platform which helps businesses to accept payments securely online, on mobile, and in-store. Each organization has developed an app exclusively available to selected users, encompassing a digital wallet and a QR code scanner.Krungsri plans to engage up to 2,000 staff members and approximately 100 merchants in the project, focusing on locations around the bank’s headquarters. Furthermore, the project will expand to include the Ploenchit branch.Photo by Florian Wehde on UnsplashMaintaining relevanceBanks are having to embrace the need to adapt to the eventuality of developments like CBDCs as, depending upon how they’re implemented, they could render some banking products obsolete. Sam Tanskul, the Managing Director of Krungsri Finnovate, a division of the Thai banking business that focuses on strategic investments, expressed the need for the bank to establish a distinct strategy for differentiating the retail CBDC from its existing PromptPay mobile payments service.Siam Commercial Bank’s pilot project will operate in a similar manner to Krungsri’s, involving staff members and nearby merchants as participants. The Bank of Thailand has emphasized that the project aims to facilitate learning rather than serve as an official pilot launch. At present, the central bank has not disclosed any official plans to implement a CBDC.Wholesale and retail CBDCsThe Bank of Thailand commenced the development of a wholesale CBDC back in 2018. It has actively participated in various projects such as the Bank for International Settlements’ (BIS) mBridge cross-border payment initiative and the Project Inthanon-Lion Rock collaboration with the Hong Kong Monetary Authority (HKMA).In a move to foster the growth of the digital token market, Thailand waived corporate income tax and value-added tax for companies issuing investment tokens in March. While this decision is expected to result in an approximate loss of $1 billion in revenue for the country, it is projected that investment tokens will generate $3.7 billion over the next two years, as stated by a government spokesperson.The Bank of Thailand’s forthcoming retail CBDC pilot project is one of a plethora of such projects being pursued throughout the Asia-Pacific region. In Japan, the Bank of Japan recently completed the second phase of a proof of concept project relative to its CBDC, with the project now progressing to phase three. Last month, it emerged that the Bank of Korea is collaborating with Samsung Electronics relative to its CBDC project. Meanwhile, India is progressing further in trialing its CBDC, while China is further along the development curve than all others in that respect.