Japan Opens Doors for VCs: Access to Crypto and Web3 Startups Expanded

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Key Takeaways:

  • Japan Set to Enable Venture Capital Investments in Cryptocurrency Projects with Regulatory Amendment
  • Japan eyes increase in Web3 startup funding opportunities

Japan has taken a significant leap forward in embracing digital asset innovation, with the recent approval of a bill that adds crypto assets to the list of permissible investments for domestic venture capital and investment funds. 

Spearheaded by the Ministry of Economy, Trade and Industry, this move marks a major shift in policy, enabling venture capital firms (VCs) in Japan to directly invest in projects issuing cryptocurrencies.

This development comes a few days after Japan’s main financial regulator, the FSA, has recommended a number of steps to shield customers against “unlawful transfers” to crypto exchanges. 

Previously, Japanese VCs faced regulatory barriers when attempting to invest in crypto assets. However, with the proposed amendment to the Act on Strengthening Industrial Competitiveness, these restrictions are set to be lifted, allowing VCs to venture into funding projects exclusively dealing in virtual currencies.

The amendment is expected to have a transformative impact on Japan’s venture capital landscape, empowering VCs to allocate capital more efficiently and driving innovation and growth in the region. 

Hiro Kunimitsu, founder and CEO of Gumi Inc., a Japanese game development firm with its blockchain investment fund, gumi Cryptos Capital, emphasized the significance of this development.

Under Japanese rules up until now, VCs were not able to invest in crypto assets,” Kunimitsu stated in an X post.

 He highlighted the challenges faced by Japanese crypto projects in sourcing capital from foreign venture capitals, and expressed optimism about the opportunities for Web3 startups originating in Japan.

The amendment allows LPs in Japan to invest in medium-sized companies and startups dealing with cryptocurrencies, in exchange for a proportionate share of the venture’s profits. 

This regulatory change is expected to lead to a rise in the emergence of crypto and blockchain startups in Japan, fostering innovation and entrepreneurship in the digital asset space.

The Ministry of Economy, Trade and Industry emphasized the objective of promoting the creation of new businesses and investment in industry, as well as providing intensive support to medium-sized companies and startups that are the driving force of Japan’s economy.

In conclusion, Japan’s approval of the bill to allow venture capital investment in crypto assets represents a significant milestone in embracing digital asset innovation. This regulatory change is poised to fuel growth and innovation in Japan’s venture capital ecosystem, while also supporting the emergence of crypto and blockchain startups in the region.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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