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The Japanese government has taken a significant step towards fostering innovation in these sectors by approving a proposal allowing certain venture capital (VC) firms to directly invest in crypto-based startups.
Here’s what you need to know about Crypto
The Japanese cabinet has approved a revision to the Act on Strengthening Industrial Competitiveness, which will add cryptocurrencies to the list of assets that local investment limited partnerships can hold. This essentially allows VCs to invest in startups that issue cryptocurrencies as their primary token.
Previously, Japanese VCs couldn’t invest directly in crypto assets, forcing local projects to seek funding from foreign investors. This new policy opens up a significant pool of domestic capital for Web3 startups, boosting their funding opportunities and potentially accelerating their growth.
This move falls under Prime Minister Fumio Kishida’s “new capitalism” agenda, which aims to cultivate a thriving Web3 industry in Japan. Additionally, the government recently amended its tax regime to potentially exempt companies from paying taxes on unrealized crypto profits, further creating a more favorable environment for the sector.