Japan Reclassifies Crypto Assets to Boost Market Participation Hong Kong Launches Policy 2.0 to Become Global Web3 Hub UAE Invests $100 Million in WLFI Tokens for DeFi Expansion

Japan's Financial Services Agency (FSA) is planning to reclassify crypto assets under the Financial Instruments and Exchange Act (FIEA). This move aims to categorize cryptocurrencies similarly to securities, which would allow for the launch of products like crypto ETFs within Japan’s legal framework. Additionally, the government proposes a flat 20% capital gains tax on crypto profits, a reduction from the current progressive rate that can reach up to 55%. This change is anticipated to boost both retail and institutional participation in the Japanese crypto market.

China Hong Kong has introduced the Digital Asset Development Policy Declaration 2.0, also known as "Policy 2.0," on June 26. This policy solidifies the region's 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 tokenized products such as government bonds and ETFs, and supports real-world asset (RWA) tokenization. The policy emphasizes regulatory clarity, technological innovation, and talent development, aiming to outpace regional competitors.

The Aqua 1 Foundation, based in the United Arab Emirates, has invested $100 million into governance tokens of World Liberty Financial ($WLFI). This investment makes Aqua 1 the largest public investor in WLFI, a crypto project linked to the Trump family. Although WLFI tokens are not currently tradable, they offer governance rights and plans for future trading. The investment is part of a broader strategy to expand RWA tokenization and stablecoin integration across global markets. Despite some political concerns, the deal underscores increasing institutional interest in DeFi from the Middle East.

In summary, the cryptocurrency market in Asia is experiencing significant regulatory and investment developments. Japan's reclassification of crypto assets under the FIEA and the proposed flat capital gains tax are expected to drive more participation in the crypto market. China Hong Kong's Policy 2.0 aims to establish the region as a global Web3 hub with clear regulatory frameworks and support for tokenized products. The UAE's $100 million investment in WLFI tokens highlights the growing institutional interest in DeFi and the potential for RWA tokenization. These developments indicate a maturing crypto market with increasing regulatory clarity and institutional involvement.