Japanese Cabinet Approves Cryptocurrencies as Assets for Local Investment LP Firms
The Japanese cabinet has made a significant move by approving cryptocurrencies as assets that can be acquired or held by local investment limited partnerships (LP) firms. This decision aims to strengthen the strategic investment environment and provide better support for local startups and medium-sized companies.
Hiro Kunimitsu, the founder and CEO of Gumi Inc., expressed the importance of this development, as Japanese crypto projects previously had to seek funding from foreign venture capitals, which posed multiple challenges. Now, with Japanese venture capitalists able to invest in crypto assets, it is expected to generate significant opportunities for the web3 startup scene in Japan.
To provide more regulatory clarity to venture capitalists engaged in cryptocurrencies, the Ministry of Economy, Trade, and Industry announced the change on Feb. 16. The amendment to the Act on Strengthening Industrial Competitiveness serves as a significant policy shift, directly permitting venture capital firms to invest in cryptocurrency projects.
This move aligns with Prime Minister Fumio Kishida’s “new capitalism” strategy, which aims to foster the development of Japan’s web3 industry. In December, the cabinet approved a tax regime revision that could exempt companies from paying taxes on unrealized profits from cryptocurrencies.
The revision to the Industrial Competitiveness Enhancement Act is currently awaiting deliberation in the legislative body. If passed, this could have a notable impact on venture capital operations in the web3 domain in Japan and potentially establish a precedent for other nations.
This decision comes in the wake of proposed measures by the Financial Services Agency (FSA) to protect users from illegal transfers, including those involving cryptocurrencies. The FSA and the National Policing Agency (NPA) are urging banks to enhance user protection measures, which includes improving the monitoring of suspicious transactions to cryptocurrency exchange providers.
Analyst comment
Positive news: The Japanese cabinet has approved cryptocurrencies as assets for local investment LP firms, aiming to strengthen the strategic investment environment and provide better support for local startups and medium-sized companies. This decision aligns with the “new capitalism” strategy and could generate significant opportunities for the web3 startup scene in Japan. It also provides more regulatory clarity and could establish a precedent for other nations.
