- Japan has amended four key acts to enable venture capital firms to invest in and hold crypto assets, aiming to promote innovation and fund domestic Web3 startups.
- The amendments remove previous prohibitions on crypto investments for Japanese VCs, who can now provide funding to local blockchain and crypto startups.
- While a digital yen is still years away, Japan is taking steps to support innovation in cryptocurrencies and become a leader in the emerging digital economy.
Japan has recently passed a bill allowing domestic venture capital firms to invest in and hold crypto assets. According to Taira Maasaki, this change aims to promote innovation and increase strategic investments into Web3 startups originating within the country.
Japan Amends Key Acts to Enable Crypto Investments
The Ministry of Economy, Trade and Industry (METI) in Japan approved amendments to four key acts, including allowing investment limited partnerships (LPs) to acquire and hold crypto assets. The amendments will enable LPs to invest in medium-sized companies and startups dealing with cryptocurrencies. As a result, Japan’s Web3 community expects more crypto and blockchain startups to emerge domestically.
Other Supportive Amendments Passed
Additional amendments were made to the Industrial Property Information and Training Center Act, the New Energy and Industrial Technology Development Organization Act, and the Industrial Competitiveness Enhancement Act. These changes further Japan’s intent to encourage innovation through increased domestic investment.
Previous Prohibition on Crypto Investments
Before the bill’s approval, Japanese venture capital firms were prohibited from investing in crypto assets. Consequently, Japanese Web3 startups often looked to overseas investors for funding. The new amendments remove this barrier.
Future Steps for Crypto in Japan
Along with enabling crypto investments, Japan is also working to resolve legal issues related to a digital yen, potentially launching it in spring 2024. However, the Bank of Japan and government have yet to officially confirm plans for a digital yen. Any formal decision would follow a national discussion, which will not happen until at least 2026.
Conclusion
The amendments in Japan allowing domestic venture capital investments into crypto assets and Web3 startups signal a significant shift. By removing previous prohibitions, Japan aims to promote innovation and increase strategic investments in emerging technologies like cryptocurrencies. While a digital yen is still years away, the country is laying the groundwork for being a leader in the new digital economy.
