Japan To Allow Cryptoassets in Their Investment Fund

By Thea Felicity

Feb 19, 2024 11:16 AM EST

Japan is making strides toward facilitating venture capital firms and investment funds to directly engage with digital assets. If allowed, this will mark a significant development in the country's financial landscape amid its concerns in the growing influence of digital assets.

Japanese Fund with Crypto

BNN Bloomberg reports that Prime Minister Fumio Kishida's administration has given the nod for a revised bill to be submitted, heralding a potential shift in Japan's regulatory framework. 

Japan Money Yen
(Photo : Jun Rong Loo (@arkenstone_jr) via Unsplash)

The bill, endorsed by the cabinet on February 16, proposes amendments to the industrial competitiveness enhancement act. The goal was to incorporate cryptoassets into the list of assets accessible to investment limited partnerships. 

These partnerships serve as a crucial vehicle for venture capital firms, enabling them to procure capital for various investment endeavors. 

Now, Kishida's broader economic agenda underscores the importance of nurturing the growth of web3 firms, which envision a decentralized internet ecosystem supported by blockchain technology. 

Meanwhile, the Ministry of Economy, Trade and Industry emphasizes the importance of these revisions. All are aimed at bolstering local startups and medium-sized enterprises, particularly in the cryptocurrency domain.

While Japan has historically been perceived as having stringent regulations governing the digital asset sector, recent moves have demonstrated a willingness to adapt. As now evidenced by relaxed rules surrounding token listings and taxation. 

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Japan Investment Funds in the Future

Currently, the bill is slated for deliberation in the current session of Japan's parliament, the Diet. For the proponents, it's a pivotal moment in the country's regulatory landscape. If approved, the amendment could potentially unlock new avenues for investment in digital assets.

Meaning, the Japanese investment fund can offer investors exposure to the burgeoning Web3 startup ecosystem. This move aligns with the recent amendments to the Act on Strengthening Industrial Competitiveness, underscoring Japan's commitment to fostering strategic investments in domestic Web3 startups. 

With token allocations to backers and cryptocurrencies facilitating early exits, the amendment could fuel innovation and investment in Japan's evolving financial sector.

Although there have been concerns over illicit crypto transactions, the Financial Services Agency urges banks to enhance monitoring efforts. 

Today, Japan still grapples with legal considerations regarding the introduction of a digital yen by spring 2024. With decisions contingent on a national discussion slated for 2026, according to Asia Tech Daily, underscoring Japan's cautious approach towards digital currency adoption.

READ MORE: 5 Biggest Cryptocurrency Trends You Need To Watch Out For In 2020

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