Hong Kong Adapts Crypto Regulations to Broaden Market Access

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. 

Ethiopian Investment Holdings, the largest sovereign wealth fund in Africa, has announced the signing of a memorandum of understanding (MoU), which is suspected to involve a deal on Bitcoin mining. Deal uncertaintyTaking to LinkedIn on Feb. 15, the sovereign wealth fund outlined details of a partnership with Data Center Service, a subsidiary of Hong Kong’s West Data Group. Separately, Kal Kassa, CEO of Ethiopian operations at Hashlabs Mining, posted on the X social media platform, outlining that it was a stakeholder in the project and that it involved Bitcoin mining. The matter lacks full confirmation however, given that Kassa subsequently deleted his post while the sovereign fund’s statement falls short of mentioning Bitcoin mining. Once verified, the project would signify a substantial investment of $250 million. It’s understood that the investment would be directed towards the establishment of state-of-the-art infrastructure tailored for data mining and artificial intelligence (AI) training operations within Ethiopia.Photo by Kelly on PexelsExploiting abundant energy resourcesA key component of this venture may involve the setup of Bitcoin mining operations utilizing Canaan Avalon miners. This initiative would align with Ethiopia's broader strategy to capitalize on its abundant energy resources to attract international investment and stimulate economic growth.Ethiopia has about 5,200 MW of installed generation capacity, 90% of it coming from hydropower and the remainder from wind and thermal sources. While the official confirmation from the government is pending, the ambitious project has sparked both excitement and skepticism within the industry. Concerns linger regarding the energy-intensive nature of Bitcoin mining and its potential strain on the local electricity supply, an issue of particular relevance in a nation where energy accessibility remains a pressing challenge for many. Bloomberg reportEarlier this month, a report from Bloomberg highlighted Ethiopia as being a new haven for Chinese crypto miners. Following the imposition of a mining ban in China in 2021, many operations were redeployed overseas. Kazakhstan in particular was a popular choice. The Eurasian country wasn’t prepared for the influx, leading to power blackouts.Hashlabs Mining co-founders Jaran Mellerud and Alen Makhmetov both featured in the article. Mellerud outlined the difficulty, stating:“Firstly, countries can run out of available electricity, leaving no room for miners to expand. Secondly, miners can suddenly be deemed unwelcome by the government and be forced to pack up and leave.”Makhmetov outlined that he had a 10 MW facility in Kazakhstan which still sits idle today as curbs and taxes enforced in Kazakhstan on miners “basically killed the industry.” Despite these difficulties in Kazakhstan and China's official ban on cryptocurrency trading, the legalization of Bitcoin mining in Ethiopia in 2022 has spurred a notable influx of Chinese miners seeking new investment avenues. Ethiopia will need to be mindful of the difficulties experienced in Kazakhstan. With that, the Ethiopian government's move towards regulating cryptographic products, including mining activities, reflects a measured yet optimistic approach towards harnessing the economic potential of Bitcoin mining. This regulatory framework aims to strike a balance between fostering sector growth and safeguarding the country's energy security and environmental commitments.  

Grab Holdings, the Singapore-based operator of the Grab super app, has extended its facility for crypto payments to its customer base in the Philippines. The company, which offers ride-hailing, food and grocery delivery and digital payments within a range of services to customers throughout Southeast Asia, introduced the option of crypto payments to service users within its home market of Singapore last year. Photo by Kiko Ferranco on UnsplashAt the time, the company expressed the view that enabling crypto payments “added flexibility and convenience” for platform users, providing them with “a seamless and efficient way to access the company’s wide range of services.” Philippine online news portal Philstar.com reported that Filipino users of the platform can now top up their GrabPay digital wallets with a range of cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), as well as U.S. dollar stablecoins USDC and USDT. In Singapore, Grab rolled out the offering in partnership with Triple-A, a company that enables businesses to pay and get paid in digital currencies. Singapore-based Crypto.com also partnered with the firm last year to enable direct crypto payments. Financial inclusionIn extending the service to the Philippines, Grab has again partnered with Triple-A, alongside Philippine crypto exchange platform PDAX. CJ Lacsican, Grab Philippines’ vice president for cities, said that “integrating cryptocurrency as a cash-in option for GrabPay reflects [Grab’s] commitment to advancing financial inclusion in the Philippines.”  She added that the move aims to empower a broader spectrum of Filipinos, particularly those who prefer the convenience of digital currencies and others who have limited access to traditional banking. Triple-A CEO Eric Barbier said that the launch of GrabPay crypto top-ups went well in Singapore, with a fantastic response from Singaporean platform users. Following that rollout, Barbier believes that the Philippines is a market that’s ready for digital currencies. “This is a big step in making digital currencies easier to use in everyday life across Southeast Asia,” he added. Driving crypto adoptionPDAX CEO Nichel Gaba suggested that the Philippines “has one of the largest crypto user bases globally,” adding that through this partnership, accessible use cases are being offered “that will both support the existing crypto community and drive greater adoption of cryptocurrency.”  Grab first pivoted to Web3 with the integration of a Polygon-based crypto wallet in September 2023, with a view towards making crypto more accessible and usable for ordinary people. The super app, which is considered by many to be the “Uber of Southeast Asia,” has 42 million monthly transacting users (MTUs) across Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.  The development of the Grab Web3 Wallet came about as a consequence of a collaboration with USDC stablecoin issuer Circle. As part of a strategic partnership, Circle’s Web3 services platform was integrated into the Grab app. More recently, Grab partnered with NATIX Network, a Solana ecosystem decentralized physical infrastructure network (DePIN) project, in an effort to collaborate on autonomous driving technology and mapping.