Amid global changes in cryptocurrency regulation, Japan, Hong Kong, and the UAE have introduced new initiatives aimed at developing and simplifying the use of digital assets.
Japan: Classification of Crypto Assets
The Financial Services Agency (FSA) of Japan plans to reclassify crypto assets under the Financial Instruments and Exchange Act (FIEA). This change would categorize cryptocurrencies similarly to securities, allowing products like crypto ETFs to launch under Japan’s legal framework. Additionally, the government proposes a flat 20% capital gains tax on crypto profits, significantly lower than the current progressive rate that reaches as high as 55%. This initiative is expected to attract more participants to the Japanese crypto market.
Hong Kong: Second Digital Asset Policy
Hong Kong has introduced the Digital Asset Development Policy Declaration 2.0, solidifying its ambition to become a global Web3 hub. The new "LEAP" framework includes licensing systems for crypto exchanges, stablecoin issuers, and custodians under the Securities and Futures Commission. It also promotes the tokenization of real-world assets and products such as government bonds and ETFs. The policy emphasizes regulatory clarity, technological innovation, and talent development, aiming to outpace regional competitors like Singapore.
UAE: Investment in WLFI Tokens
The Aqua 1 Foundation, based in the UAE, has invested $100 million into governance tokens of World Liberty Financial ($WLFI). This makes Aqua 1 the largest public investor in WLFI, a crypto project linked to the Trump family. While WLFI tokens are currently non-tradable, they offer governance rights and plans for future trading. The investment is part of a broader strategy to expand real-world asset tokenization and stablecoin integration across global markets. Despite some political concerns, the deal underscores increasing institutional interest in DeFi from the Middle East.
The proposed changes in Japan, Hong Kong, and the UAE demonstrate active steps toward regulation and integration of cryptocurrencies into the financial system, contributing to the formation of a more mature and stable market for digital assets.
