TLDR:
Key Points:
- Japan has approved amendments allowing Venture Capital firms to invest in cryptocurrencies and Web3 companies for the first time.
- The changes aim to boost Japan’s digital economy ambitions and attract blockchain innovation.
The Japanese government has approved amendments that could see Venture Capital (VC) firms invest in cryptocurrencies and Web3 companies for the first time. This major shift seeks to bolster Japan’s digital economy ambitions and attract more blockchain innovation.
As per an official release from the nation’s Ministry of Economy, Trade, and Industry, the cabinet has greenlit letting limited partnership (LP) companies governed by the Limited Partnership Act hold cryptocurrencies. Previously under the 1998 Act, such firms could not acquire crypto assets. This could change how Web3 projects in Japan raise capital, as currently they can only offer VC shares. Hiro Kunimitsu, CEO of Thirdverse, noted Australian VCs had to fill the void due to local restrictions, as some projects issue only crypto tokens. He commented on Twitter that “this is a big step in the right direction”.
The amendments come as Japan ramps up digital economy plans like developing virtual cities. In February, the city of Kochi announced creating a metaverse attraction to boost tourism and local businesses online. Last year, the ministry signaled allowing LPs to invest in security tokens too. No crypto law proposals have failed in Japan, suggesting these changes may take effect smoothly to strengthen its Web3 standing.
However, regulators are mindful of crypto risks like fraud. In February, the top financial watchdog urged banks to increase monitoring of crypto-tied transfers. With recession now official too as Bloomberg Economics recently noted, authorities will need to balance innovation and stability.
