Doubling Of Japanese Listed Companies Holding Cryptocurrencies

According to PANews, the number of listed Japanese companies holding cryptocurrencies is on a steady rise. As per the latest statistics, as of May 2024, 31 companies have ventured into the cryptocurrency sector, doubling the number from three years ago, which stood at 16. Companies primarily involved in digital services and game development are particularly noteworthy. The data was compiled by Pafin, based in Tokyo's Chiyoda, from the recently published financial statements of approximately 4,000 companies listed on the Tokyo Stock Exchange. One of the reasons these companies hold cryptocurrencies is their value as an investment, and secondly, to avoid asset shrinkage caused by the depreciation of the yen. On the other hand, some companies have adjusted their strategies after purchasing virtual currencies, hoping to create synergies with their businesses. However, Japanese commercial companies holding virtual currencies still face two major obstacles. The first is security. Virtual currencies processed on the blockchain are difficult to manage. For instance, the attack on DMM Bitcoin in May is an example. Commercial companies dealing with large amounts of money need to seek robust custodial services. The other obstacle is accounting and auditing issues. Over the past few years, the tax treatment for companies owning or investing in issued cryptocurrencies has gradually become clear. But if a company tries to issue a new virtual currency, Japanese auditing firms often refuse to audit and advise them to sell before listing the virtual currency. Although the Japanese Certified Public Accountants Association and the Japan Cryptocurrency Business Association (JCBA) jointly held a 'Business Operator and Auditor Accounting and Auditing Joint Forum' to enhance mutual understanding, there are still significant disagreements on some issues.