Japan’s Crypto-Friendly Bill: A Boost For Web3 Innovation

Japan is moving forward with a plan to allow investment funds to hold crypto directly, according to a Bloomberg report. The revised bill, approved by the cabinet of Prime Minister Fumio Kishida on February 16, is expected to be submitted to the parliament for debate soon.

The bill seeks to modify Japan’s Industrial Competitiveness Enhancement Act, which regulates the activities of investment limited partnerships (ILPs). ILPs are a standard vehicle for venture capital firms to raise funds and invest in startups.

The current law does not permit ILPs to acquire or hold crypto assets, which limits their ability to support Web3 firms that use blockchain and digital tokens as part of their business model. The proposed amendment would change this by recognizing crypto as an eligible asset class for ILPs.

It aligns with Prime Minister Kishida’s vision of revitalizing Japan’s economy by fostering innovation and growth in the Web3 sector. Japan has been known for having strict rules on crypto, but it has also shown signs of easing some of them, such as those related to token listings and taxation.

Enabling More Exposure To Crypto In The Investment Sector

If the bill passes, it would open up new opportunities for investment funds to engage with crypto and Web3 startups. For instance, they could receive tokens as part of their investment deals or use crypto to exit their investments instead of relying on traditional methods like stock market listings.

It would also increase the exposure of crypto to the broader investment community, as more funds could diversify their portfolios with digital assets. It could boost the demand and adoption of digital currency in Japan and beyond.

The bill represents a significant shift in Japan’s regulatory stance on digital currency, reflecting a growing awareness of its potential benefits and importance for the future of the digital economy.

Global Crypto Market Surge

As Japan prepares to embrace digital in its investment landscape, the market will closely watch the bill’s progress through the parliament. The debate’s outcome could significantly impact the direction and development of Japan’s crypto and Web3 regulations.

The bill comes when the global digital market reaches new heights, surpassing a total market capitalization of $1.92 trillion. It is a 76.87% increase from a year ago, indicating a strong growth trend for the industry.

The 1-D chart shows the total crypto market cap’s valuation at $1.92 trillion. Source: TOTAL on TradingView.com

Bitcoin, the leading cryptocurrency, accounts for more than half of the market cap, with a value of $1.02 trillion. Bitcoin has been maintaining its dominance in the market despite the emergence of other competitors and challenges.

Related Reading | South Korea Party Delays Crypto Tax For Regulation Reform

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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