The Web3 project team of Japan’s ruling Liberal Democratic Party released a white paper with recommendations for expanding the country’s Web3 industry, which has become a key element of the national strategy under the prime minister Fumio Kishida‘s leadership.

While other countries are focusing on consumer protection regulations, Japan is striving to do so create a more crypto-friendly environment after firms migrated to other jurisdictions due to high tax burdens.

The Web3 project team has worked with typical bureaucratic procedures to develop regulatory proposals covering non-fungible tokens (NFTs) for decentralized autonomous organizations (DAOs).

“The cryptocurrency industry was driven by early adopters, but it will shift to mass adoption from now on,” he said Akihisa ShiozakiGeneral secretary of the party’s Web3 project team, in a interview with CoinDesk Japan.

Shiozaki noted that major Japanese players are entering the market, with mobile operator NTT Docomo committing up to 600 billion yen ($4 billion) for Web3 infrastructure and major financial institutions considering issuing stablecoins.

The white paper emphasizes Japan’s leadership at the upcoming G7 summit, where crypto will be a topic of discussion.

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It suggests that Japan focus on the future potential of Web3 and demonstrate its leadership in technology-neutral and responsible innovation.

The paper also recommends additional changes to tax rules, including tax exemptions for companies holding tokens issued by other companies that are not intended for short-term trading.

The white paper underscores the urgent need for accounting standards as Web3 firms struggle to find auditors.

She suggests that ministries and agencies support the Japanese Institute of Certified Public Accountants in developing guidelines.

The paper also recommends the introduction of a DAO law based on Japan’s Godo-Kaisha business structure and changes to the…