How is cryptocurrency regulated in Japan?

Cryptocurrency regulation in Japan stands as a benchmark for clarity and comprehensiveness in the East Asian region. The country has established a robust framework that recognizes Bitcoin and other digital currencies as legal property. Notably, Japan's Payment Services Act recognizes the legitimacy of digital currencies, while the Virtual Currency Exchange Association and Japan Security Token Offering Association serve as self-regulatory organizations. Furthermore, Japan has taken strides to adapt its legal landscape to emerging trends, such as the legalization of stablecoins and the recent tax reform that aims to alleviate the tax burden on crypto asset holders. This reform is significant as it removes the tax on unrealized gains, providing investors with a more favorable tax environment. Given Japan's progressive approach to crypto regulation, it begs the question: How does this regulatory framework shape the overall crypto ecosystem in the country? Does it foster innovation and adoption, or does it pose challenges for crypto businesses?