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Klaytn and Incheon City’s NFT Project Set to Bring Blockchain to the PublicThe Klaytn Foundation, a non-profit organization backed by South Korean messaging giant Kakao, announced Tuesday (local time) a new collaboration with the city of Incheon to launch the Incheon Universe NFT project on the Klaytn blockchain.Photo by joon young, Park on PexelsNFTs representing seals and lighthousesSet to be issued on Wednesday, these non-fungible tokens (NFTs) are based on Incheon Heroes characters, which draw inspiration from seals, one of the country’s endangered species, and lighthouses, seen as guardians of the sea. The Incheon Universe NFT project will harness the online metaverse and decentralized autonomous organizations (DAOs) to create a space where residents can connect, sharing their preferences and values. Additionally, the project seeks to enhance the pride of those living in Incheon.The Incheon Universe NFT project is set to kick off on October 25, marking the inaugural minting of Incheon Heroes NFTs on the Klaytn blockchain. These NFTs will also serve as membership passes. For this initiative, the Klaytn Foundation has been offering technical assistance and advice.Fee delegation featureThe foundation and Incheon City plan to leverage the fee delegation feature to remove the burden of a small transaction fee typically associated with NFT minting. This move is intended to lower the entry barrier for individuals unfamiliar with participating in blockchain projects. Incheon is also orchestrating in-person events catered to NFT holders. The city is also in discussions with the Klaytn Foundation, mobile carrier LG Uplus, media commerce entity Lotte Homeshopping, marketing solutions provider Daehong Communications, and others for more collaborative endeavors.Commenting on the collaboration, Lee Se-woong, Brand Manager of Incheon City, emphasized how both parties benefit from the partnership. While the Klaytn Foundation has been at the forefront of collaborations in the global blockchain scene, leading various projects, Incheon is positioning itself for new initiatives in the Web3 era. Lee sees this partnership as a major boost for the city.Seo Sang-min, the Klaytn Foundation’s Representative Director, mentioned that the foundation is committed to working closely with the city to ensure the success of the Incheon Universe NFT project as a city-driven blockchain initiative. He emphasized that Klaytn aims to help more people experience firsthand the benefits of Web3 technology.Incheon has been at the forefront of driving blockchain initiatives. Among its recent undertakings is the Global Blockchain Incheon Conference (GBIC 2023), which is slated for October 30 to 31. The event will highlight presentations from renowned speakers representing blockchain entities like Polygon Labs, Crypto.com, and the Astar Foundation.

A number of reports published by local Russian media in recent days suggest that the Russian authorities are implementing taxation and regional controls on cryptocurrency mining.Photo by Michael Parulava on UnsplashRegional mining banA report published by the Moscow Times on Nov. 19 suggests that Russia’s Deputy Prime Minister, Alexander Novak, has led a government commission that plans to implement a ban on cryptocurrency mining in specific Russian regions.  The authorities have been motivated in enacting such a ban in order to combat power shortages. With that, a ban is being implemented on a temporary basis during the heating season. The restrictions will apply to miners located within six regions within the North Caucasus, as well as the Zabaikalsky region in Siberia and territories now controlled by Russia in Ukraine. The ban will apply from December through to mid-March 2025, with this seasonal restriction to be applied subsequently each winter until 2031. Back in August, Russian President Vladimir Putin signed into law legislation which legitimized cryptocurrency mining within the Russian Federation. That law recognized mining activities and the concepts of mining pools and mining infrastructure operators. The legislation requires mining operators to register with the government. Individual miners can mine without registering so long as they stay within specified energy-use limits. Earlier this month, the authorities set a power consumption limit of 6,000 kWh per month for those unregistered miners.  The legislation also recognized the ability of stakeholders to trade in foreign digital assets on Russian blockchain platforms, with Russia’s central bank, the Bank of Russia, retaining the ability to ban specific digital assets from being traded if such trading is deemed to be a threat to Russia’s financial stability. 15% tax proposalEarlier this week Russia’s Interfax news agency reported that the Russian government had approved draft amendments to a bill concerned with the purchase and sale of digital currencies relative to crypto mining activity.  According to those proposed legislative amendments, digital assets will be classified as property from a taxation perspective. Income derived from mining activities will be assessed in terms of taxation based on market value at the time of receipt of the asset. The legislative amendments propose a 15% tax rate for cryptocurrencies. Furthermore, crypto transactions will not be subjected to value-added tax (VAT). However, income derived from such transactions will be taxable in the same way as income from transactions involving securities. Crypto mining operators will be permitted to deduct operating expenses from their taxable income. Russia’s Finance Ministry is understood to have clarified that the taxation approach would strike a balance between Russian government interests and those of commercial operators. With the introduction of legislation to recognize cryptocurrency mining activity earlier this year, Ki Young Ju, CEO of on-chain and market data analytics firm CryptoQuant, noted the country’s growing involvement and national-level engagement with digital assets. The coming months will determine if these latest crypto mining restrictions will dampen the level of involvement of Russia-based crypto miners.

The Japanese government is moving to modernize municipal finance through blockchain technology, though the timeline for much-anticipated cryptocurrency tax reforms appears to be drifting further into the future. Municipal bonds as security tokensAccording to a Dec. 23 Nikkei report cited by CoinDesk Japan, policymakers decided to begin preparing to issue local government bonds as security tokens. The government aims to submit the necessary legislation during the ordinary Diet session in 2026. Concrete measures, shaped by requests from local municipalities, are expected to be finalized ahead of next year. Advocates say that issuing bonds as blockchain-based security tokens would modernize local government finance by reducing friction in issuance and settlement and enabling real-time tracking of investor data.Photo by Luke Stackpoole on UnsplashCrypto tax reform seen as taking timeWhile the digitization of bonds progresses, the schedule for easing the tax burden on crypto investors is reportedly facing setbacks. CoinPost reported that, according to sources, the transition to a separate tax on crypto gains is now expected to take place in January 2028, a delay from the initially envisioned target of January 2027. The legislative groundwork is still slated for the 2026 Diet session, where amendments bringing crypto assets under the Financial Instruments and Exchange Act (FIEA) will be deliberated. However, the current cautious policy approach prioritizes investor protection and adjustments to the tax reporting framework, making a delay in implementation more likely. The proposed amendments address the steep tax liabilities currently faced by domestic investors. Under Japan’s current system, crypto gains are treated as miscellaneous income, taxed comprehensively with salary and other earnings at rates that can reach roughly 55% when including local taxes. The plan, which the ruling coalition has been coordinating, aims to align crypto taxation with that of stocks and forex trading. It would introduce a flat 20% separate tax rate and allow loss offsets and carryforwards of up to three years, bringing crypto closer to other financial assets. It would also ease tax filing by potentially adopting a framework similar to the designated accounts used in Japan’s securities market, reducing the reporting burden on digital asset investors. The slow pace of these regulatory changes has drawn criticism from the private sector. Tomoya Asakura, CEO of SBI Global Asset Management, a subsidiary of SBI Holdings, took to the social media platform X to voice concerns about the pace of reform. Asakura characterized the process as "extremely slow," warning that the lag places Japan behind jurisdictions such as the U.S., Asia, and the Middle East. He argued that continued delays would further impede domestic initiatives in Web3 and digital finance. Bybit to pull out next yearAmid this shifting regulatory landscape, foreign entities are adjusting their operations. Dubai-based crypto exchange Bybit, which is not registered with Japan’s Financial Services Agency, announced on Dec. 22 it will phase out services for Japanese users to remain compliant with local rules. The exchange has stopped onboarding Japanese residents or nationals since 12:00 p.m. UTC on Oct. 31, and accounts held by customers in Japan will be gradually restricted starting next year.