TLDR:
- Japan’s Cabinet approved a Bill allowing limited liability partnerships (LLPs) to invest in crypto asset tokens, benefiting venture capital (VC) firms.
- The legislation is expected to pass, providing VCs with new opportunities to invest in web3 crypto tokens.
Japan’s Cabinet has approved a Bill, the Industrial Competitiveness Enhancement Act, which will allow limited liability partnerships (LLPs) to invest in crypto asset tokens. This development is expected to benefit venture capital (VC) firms, as most VCs operate as LLPs. This legislation marks a significant step forward for VCs in Japan, as they have previously been prevented from investing directly in tokens. This limitation may have discouraged some VCs from investing in web3, leading some to explore opportunities outside of Japan. However, with this new law, VCs focused on the sector will have more flexibility in their investment strategies.
Last year, Japan’s largest bank, MUFG, was considering the creation of crypto trusts to enable VCs to invest indirectly in crypto tokens. Additionally, Japan is recognized for its advanced blockchain and web3 ecosystem, with a larger volume of real-world asset tokenization, particularly in real estate. The country also boasts a sophisticated legal framework for stablecoins, allowing for various types including trust-based stablecoins and bank deposit tokens.
Japan’s progress in this area is timely as the Financial Services Agency (FSA) is launching the inaugural Japan Fintech Week, highlighting the country’s advancements in blockchain and web3 technologies. Overall, Japan’s efforts to facilitate VC investments in web3 crypto tokens are positioning the country as a leader in the digital asset space, attracting attention from global players such as Circle and Binance.
