Japan’s Internal Affairs and Communications Minister, Sanae Takaichi, has stated that crypto donations to individual politicians are legal.
In a press conference held Tuesday, Reuters Japan reported Takaichi as stating that since cryptocurrencies cannot be regarded as securities, they can be used to fund individual politicians during elections, without being subjected to the stringent Japanese Political Funds Control Act.
When crypto assets are donated to individual politicians, they become legal and are not included in the report on the balance of political funds.
Per the report, the Japanese Political Funds Control Act requires donations to individual candidates in fiat currencies, stocks, bonds, and other securities to be reported by either the donor or the candidate receiving the donation.
Takaichi seems to level the playing field for candidates who do not have the financial means to support their campaigns, as they can resort to using cryptocurrencies to raise funds from their supporters.
However, the news did not go down well with many experts as they feel the law that governs election funding is outdated and needs to be reviewed. In this regard, a Law Professor from the Japanese University, Tomoaki Iwai was quoted in the report as saying:
The current law does not keep pace with the times. The existing Political Funds Control Law that oversees the campaign requirements needs urgent upgrading.
Similarly, other people who weighed into the matter stated that since cryptocurrencies are taxable in Japan, not reporting its transactions will hinder tax collection, as the government would not be able to track the transfer of digital assets with this provision.
When quizzed on whether the Japanese Political Funds Control Act is necessary, Takaichi stated that she does not see the need for political funding to be regulated as it tends to hinder the success of politicians’ campaigns.
Coinfomania reported last year that Japanese tax regulators were working on strategies to curb tax evasion on crypto-related transactions in the country.