TLDR:
- Japan’s cabinet has approved a bill allowing venture capital firms to hold cryptocurrency assets to support Web3 startups.
- The move aims to boost strategic investments in domestic startups by permitting limited partnership firms to invest in crypto assets.
Japan’s cabinet has granted approval for a bill that will allow investment funds and venture capital firms in the country to hold cryptocurrency assets, as announced by the Ministry of Economy, Trade and Industry. The decision signifies Japan’s effort to ease restrictions on venture capital crypto investments, enabling these firms to support startups dealing exclusively in cryptocurrencies within the Web3 space. This will be made possible through revisions to the Act on Strengthening Industrial Competitiveness, allowing limited partnership firms to possess and invest in crypto assets.
Renowned for its regulatory stance on stablecoins, Japan continues to pave the way for Web3 technologies while upholding stringent user protection measures. The recent approval from the cabinet follows plans reported in September 2023 to relax regulations governing venture capital investments in crypto startups. The Ministry of Economy, Trade and Industry emphasized the importance of the approved revision, which includes amendments to facilitate strategic investments supporting local startups and medium-sized enterprises, particularly in cryptocurrencies.
These changes will enable venture capital firms to engage in projects exclusively dealing with cryptocurrency issuance. Japan has traditionally restricted VCs from investing in crypto assets, primarily focusing on traditional equity investments. With the new opportunity for Japanese VCs to invest in crypto assets, there is optimism for the growth of Web3 startups in the country. Under Prime Minister Fumio Kishida’s economic policy, Japan has actively pursued the development of its Web3 sector, with plans to present a bill to formalize changes to VC crypto investment regulations in parliament later this year.
While parliamentary approval is pending, Japan continues to address legal concerns regarding the introduction of a digital yen by spring 2024. The government’s proactive approach in embracing Web3 technologies signals a shift towards a more crypto-friendly environment for startups and investors in the country.
