Japan Boosts Web3 Startups: Allows LP Firms to Acquire Cryptocurrency, Plans Digital Yen
Summary:
Japan strategizes to increase domestic investments into Web3 startups by allowing limited partnership (LP) firms to buy and manage cryptocurrency. The Ministry of Economy, Trade and Industry has passed a bill amending various acts, promoting new business creation via increased domestic investments. The amendments enable LPs to invest in medium-sized and startup companies dealing with cryptocurrencies. Japanese venture capitals, previously prohibited from investing in crypto, are set to influence a rise in Japan-originated crypto and blockchain startups. Also, plans are underway to resolve legal issues related to issuing a digital yen in spring 2024.
Japan is strategizing to boost crucial domestic investments into Web3 startups by permitting limited partnership (LP) firms to purchase and manage cryptocurrency assets. The Japanese Ministry of Economy, Trade and Industry (METI) has given the green light to a legislation designed to stimulate the inception of innovative ventures and industries through the escalation of domestic investment. This has been achieved by updating four significant acts, one of them being the Act on Investment LP Agreements. A rudimentary translation of the modified legislation implies: "Initiatives such as adding crypto assets to the portfolio of assets that investment limited partnerships (LPS) can buy and manage will be taken."
This alteration empowers LPs in Japan to invest in mid-sized companies and emerging businesses dealing in digital currencies, in return for a share of the venture's earnings that is proportional to their investment. This is expected to result in a boom of crypto and blockchain startups emerging from Japan, according to the Web3 community in the region.
The other updates in the Industrial Property Information and Training Center Act, the New Energy and Industrial Technology Development Organization Act, and the Industrial Competitiveness Enhancement Act further underscore Japan’s ambition to encourage innovation and fuel domestic financial inflow.
Before the approval of this legislation, Japanese venture capital firms were prohibited from investing in cryptocurrencies. This led to Japanese Web3 startups frequently seeking support from foreign investors. Masaaki Taira, a participant in the House of Representatives in Japan, made a public statement regarding the new development: "A cabinet decision has been made! Steps will be implemented to include crypto assets in the repertoire of assets that investment limited partnerships (LPS) can purchase and own."
Furthermore, Japan is actively trying to iron out legal concerns related to the issuance of a digital yen in the spring of 2024. A report that surfaced on January 26 indicated that neither the Bank of Japan (BoJ) nor the government had formally announced the release of the digital yen. Any decisions regarding this matter will be made only after "a national discussion" which is not set to occur until at least 2026.
Published At
2/19/2024 1:14:18 PM
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