Sony, Toyota and other giants have entered the blockchain field, and industry participants call on the Japanese government to relax regulations

Entertainment giant Sony Group Corp. is the latest to join the ranks of Japanese companies seeking to leverage blockchain technology, a trend that presents a challenge to the government. Sony officially launched its L2 network Soneium last month, hoping developers can use it to build applications that enhance the company’s products. It’s a work in progress, aiming to combine Soneium with games, music and movies and create potential opportunities. Other Japanese companies exploring various blockchain-related initiatives include Nippon Telegraph & Telephone Corp., Toyota Motor Corp. and Mitsubishi UFJ Financial Group Inc. The latter, Japan’s largest bank, is considering issuing a stablecoin. The question facing the Japanese government is whether to heed the crypto industry’s calls to reduce onerous rules to reduce costs and spur growth. Under Prime Minister Fumio Kishida, who supports Web3, regulators did take steps to make it easier to list digital tokens on cryptocurrency exchanges. But his term is coming to an end, and it’s unclear whether any of the leaders who are expected to succeed him will also support Web3, or further regulatory changes. A major gripe for industry players is that traditional investment gains are typically taxed at 20%, but cryptocurrencies are taxed at as much as 55%. Angela Ang, senior policy adviser at blockchain intelligence firm TRM Labs, said: "It always takes time for regulators to adapt to new business models, and success requires a long-term commitment of time and resources." However, she said that Japanese officials' "increasingly innovative policy tendencies" help explain why companies such as Sony are experimenting with digital ledgers. Japan introduced stablecoin rules in 2023 and developed a framework for cryptocurrency trading. Singaporean cryptocurrency lender Amber Group sold its digital asset trading platform in Japan to a Sony subsidiary last year. Before the sale, Amber's managing partner Annabelle Huang said that the daily is a "very high-quality market, but the regulation is very strict." (Bloomberg)