🚀 Japan Government Set to Relax VC Crypto Investment Rules 🇯🇵

Japanese Government Plans to Relax VC Crypto Investment Regulations for Web3 Companies

Japan’s government to ease regulations on VC crypto investments.

Last updated: February 18, 2024 22:00 EST | 2 min read

VC crypto investment rules could be relaxed in Japan, where the government plans to allow venture capital firms to invest in Web3 companies.

According to an official release from the nation’s Ministry of Economy, Trade, and Industry and the media outlet CoinPost, the cabinet has approved a move that could soon let VCs hold crypto.

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VC Crypto Investment: Japan Ready to Take the Plunge?

The Japanese Cabinet wants to change laws pertaining to Limited Partnership Funds (LPS). LPSes are typically funds that invest in unlisted companies and startups.

LPS companies and funds are governed by the terms of the Limited Partnership Act of 1998. Last year, the ministry announced plans to allow LPS operators to invest in security tokens.

But it maintained at the time that it would not allow them to hold cryptoassets. However, in its latest announcement, the ministry said the government was ready to relax this rule.

The media outlet reported that the cabinet has “agreed to add cryptoassets to the list of assets that [an] LPS can acquire and hold.”

The move would potentially revolutionize the way Web3 firms raise funding in Japan. Under existing rules, startups can only offer VCs shares in their companies, as the law blocks them from giving LPS investors crypto.

On X, the Thirdverse CEO Hiro Kunimitsu pointed out that web3 projects have until now been forced to raise funds from overseas VCs.

🚀🌐💼 This, the CEO said, throws up a “major barrier to entry.” But Kunimitsu said that the Cabinet decision could provide “a major opportunity” for Japanese Web3 startups. The CEO wrote:

“Japanese VCs could not invest in [cryptoasset-related firms]. Therefore, from the outset, these firms’ projects faced a huge hurdle that involved sourcing finance from overseas VC.”

Crypto Move ‘Was Planned Last Year’

News outlets claim that the move has been in the pipelines since September last year. They say that the government plans to submit a bill to parliament sometime this year.

Lawmakers would still need to approve any proposed legal amendment on the matter of VC crypto investment.

🌐⚖️ However, no piece of government-proposed crypto legislation has yet failed to receive parliamentary approval in Japan.

On February 7, the city of Kochi announced plans to create a virtual city on a metaverse platform to attract tourists and sell local products.

Also this month, the top Japanese financial regulator asked banks in the nation to increase scrutiny of crypto-related transfers, fearing a rise in token-related fraud.

🎯 Q&A: What You Need to Know About Japan’s VC Crypto Investment Relaxation 🇯🇵

• Q: Will this relaxation of VC crypto investment rules benefit existing Japanese startups?

• A: Absolutely! The ability for Japanese VCs to invest in cryptoasset-related firms will provide a major boost for local startups, removing the need to rely solely on overseas VCs for funding.

• Q: How will this impact the Web3 ecosystem in Japan?

• A: This move has the potential to revolutionize the funding landscape for Web3 projects in Japan, allowing them to access domestic venture capital and fuel innovation in the space.

• Q: Are there any risks associated with this relaxation of rules?

• A: While the decision is undoubtedly positive, there may be concerns regarding potential regulatory oversight and investor protection. However, Japan has a track record of embracing crypto legislation, mitigating these potential risks.

💡 Future Outlook and Investment Recommendations

With Japan’s government taking steps to relax VC crypto investment rules, it’s clear that the country recognizes the importance and potential of Web3 technologies. This development opens up exciting opportunities for domestic startups and venture capital firms.

As the ecosystem evolves, investors should keep an eye on innovative projects and companies that emerge in the Japanese Web3 space. By staying ahead of the curve, investors can position themselves for potential success and contribute to the growth of this burgeoning industry.

📚 References:

1. Japan Metaverse City Kochi Unveils Tourism Boost Plans
2. Belarus CBDC Will Let Nation Decentralize Cross-border Trade
3. Kochi Announces Plans to Create a Virtual City on Metaverse Platform
4. Australian Security Regulator Asks Banks to Increase Scrutiny of Crypto-related Transfers
5. Follow Us on Google News

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