This Week In Crypto Asia: India’s Reforms on Crypto Tax, Japan’s Initiative for Stablecoins, And DBS’s Efforts in Tokenization

The crypto ecosystem in Asia is perpetually evolving, particularly following the recent decline of Bitcoin and ETH. In the midst of this, significant regulatory shifts are occurring within the Asian crypto arena.

This is what unfolded.

India’s Crypto Tax Discussions Propel Asian Crypto Policy Changes

The Central Board of Direct Taxes (CBDT), which oversees direct taxation in India, has apparently engaged with local crypto entities about its existing virtual digital asset (VDA) regulations, as reported on 18 August 2025.

Insiders from the industry disclosed that the CBDT probed the practicality of the current taxation measures on crypto and invited opinions on the necessity for a dedicated legal framework.

Attention appears to be directed at the 1% tax withheld at source (TDS) on digital currency transactions, the limitations on wrecked offsets, and uncertainties surrounding international transactions.

Moreover, the CBDT solicited feedback on identifying government bodies that would supervise the formation of the new crypto regulations.

India Focuses on Crypto Tax Reform

The CBDT in India is seeking public input to refine crypto regulations. There is a possibility of lowering the 1% TDS on crypto trades and potentially allowing investors to offset losses, aiming for greater fairness and simplicity.#CryptoNews #tax #India #Indian pic.twitter.com/vdDDqfBIyy

— Tanveer (@tanveeralam777) August 19, 2025

The taxation authority has invited stakeholders from India’s crypto landscape to share data on capital flight linked to crypto, especially regarding the trading volume that has relocated offshore due to excessive taxation, regulatory gaps, and liquidity issues.

Authorities also asked for comparisons with other regions to evaluate India’s tax competitiveness.

Further, the CBDT sought insights on the peculiarities of TDS application, including determining the residency of counterparties, assessing asset values in fluctuating markets, and reconciling peer-to-peer trading.

If further probes arise, considerations may include whether TDS application should differ among retail investors, institutional participants, and crypto market makers.

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Japan Enters Asian Crypto Initiative With Its Yen Stablecoin Launch

Japan’s Financial Services Agency (FSA) is said to be set to approve Tokyo-based fintech company, JPYC, marking the launch of the nation’s inaugural yen-backed stablecoin.

A Nikkei Asia report from 18 August 2025 indicates that JPYC anticipates receiving regulatory approval by autumn this year, allowing for the issuance of ¥1 trillion ($6.78 billion) in stablecoins over the next three years.

This initiative aligns with Japan’s Payment Services Act of 2022, which officially acknowledged fiat-pegged tokens as Electronic Payment Instruments.

Japan’s leap toward a yen stablecoin alongside China’s exploration of a digital yuan illustrates how Asia is vying for dominance in the upcoming financial landscape. These developments could redefine trade flows and establish new benchmarks in global stablecoin regulation.

— The External Range Crypto holder (@official_Ert) August 22, 2025

In Japan’s scenario, tangible assets such as bank deposits and government bonds will secure its stablecoin, contrasting algorithmic or crypto-backed stablecoins that stabilize via smart contracts and supply-demand dynamics.

JPYC has crafted the Yen-backed stablecoin aimed at international remittance, corporate dealings, and DeFi (Decentralized finance), marking a significant push by Japan’s authorities towards embracing and promoting distributed record technologies.

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Singapore’s DBS Bank To Tokenise Structured Notes On ETH

Singapore’s premier financial institution, DBS Bank, announced in a release on 21 August 2025 its plan to digitise structured notes on the ETH Distributed ledger.

These structured notes traditionally represent complex investment vehicles designed for institutional investors. With DBS Bank’s choice to tokenise them on ETH, they will now be offered in fractionalised units of $1000, enhancing accessibility and ease of trading.

The initial set of tokenised notes will be tied to crypto performance, providing payouts aligned with the rise in crypto prices while incorporating safeguards against potential losses.

$BMNR, $SBET, $ETH
DBS Bank is set to tokenise structured notes on the ETH blockchain in light of the significantly rising volume of traded crypto options and notes (+60% from Q1 to Q2 2025). ‘Asset tokenisation represents the next frontier of financial trading market infrastructure,’ stated Li Zhen/ Head of GFM, DBS

— Eliworld (@Eliworld362190) August 21, 2025

To facilitate the distribution of these tokens, DBS Bank has aligned with regulated platforms such as ADDX, DigiFT, and HydraX, ensuring participation is confined to accredited and institutional investors.

The bank also stated plans to broaden tokenisation beyond crypto-linked notes to encompass equity and credit-linked structured products.

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Kyrgyzstan Urges US, UK To Reevaluate Crypto Sanctions

Kyrgyzstan has responded against the recent UK sanctions targeting multiple crypto companies allegedly tied to Russian financial networks.

A report from Reuters indicates that the nation’s president, Sadyr Japarov, appealed to the leaders of the US and UK, arguing that the imposed sanctions unjustly penalise Kyrgyz firms and politicise economic endeavors.

The sanctions from the UK centered on firms linked to the A7A5 stablecoin, pegged to the Russian Ruble, which transacted over $9 billion in just four months and is available on Ethereum and Tron.

Evasion of Russian Sanctions Via Kyrgyz Crypto

A recent report suggests that Russian entities are allegedly utilizing Kyrgyzstan’s crypto sector to bypass international sanctions. Discussions on X underscore regulatory loopholes as a critical concern, with calls for stricter control measures.

— AI Announcement Swarm (@AINEWS_Swarm) July 26, 2025

The targeted firms include Grinex and Meer, which experts believe to be successors to Garantex, a previously sanctioned Russian operation.

While the nation has significantly broadened its crypto sector, having issued over 100 VASP (Virtual Asset Service Provider) licenses and appointing Binance’s founder Changpeng Zhao as an adviser, Western officials and blockchain analytics firms like TRM Labs are concerned that criminals are increasingly using Kyrgyz platforms to transfer illicit funds back to Moscow.

Moreover, authorities suspect that offenders frequently use the same infrastructure and personnel from previously sanctioned entities to reintroduce illegal funds.

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The post This Week In Crypto Asia: India’s Crypto Tax Reforms, Japan’s Stablecoin Push, And DBS’s Tokenization Drive appeared first on 99Bitcoins.