Key takeaways:
- By permitting LP entities to purchase and hold crypto assets, Japan hopes to promote strategic domestic investments into Web3 startups.
- Prior to the bill’s passing, venture capital firms in Japan were not allowed to make investments in cryptocurrency assets.
By permitting limited partnership (LP) entities to purchase and hold cryptocurrency assets, Japan hopes to promote strategic domestic investments into Web3 startups.
The Act on Investment Limited Partnership Agreements is one of four important acts that the Ministry of Economy, Trade, and Industry (METI) in Japan adopted as part of a bill to encourage the development of new companies and sectors through increasing domestic investments. The revised text can be roughly translated as follows:
“We will take measures such as the addition of crypto assets to the assets that can be acquired and held by investment limited partnerships (LPS).”
Under the amended law, limited partners (LPs) in Japan are now able to engage in startups and medium-sized businesses that deal with cryptocurrencies in exchange for a corresponding amount of the venture’s profits. As a result, the Web3 community in the area anticipates an increase in the number of blockchain and cryptocurrency firms that are based in Japan.
Japan’s intention to encourage innovation and stimulate domestic investment is further supported by the further revisions made to the Industrial Property Information and Training Centre Act, the New Energy and Industrial Technology Development Organization Act, and the Industrial Competitiveness Enhancement Act.
Prior to the bill’s passing, venture capital firms in Japan were not allowed to make investments in cryptocurrency assets. Consequently, Web3 startups in Japan frequently sought assistance from foreign investors. Japanese politician and House of Representatives member Masaaki Taira made the following announcement:
“Cabinet decision has been made! Measures will be taken to add crypto assets to the list of assets that can be acquired and held by investment limited partnerships (LPS).”
Furthermore, Japan is already addressing the legal concerns associated with launching a digital yen in the spring of 2024. According to a report released on January 26, the government and the Bank of Japan (BoJ) have not formally confirmed the introduction of the digital yen. Any decisions on it will be made following “a national discussion,” which is expected to take place no earlier than 2026.
