Japan government announces change in startup funding regulations. Japanese startups are officially permitted to raise funds using crypto assets under a new system known as “Investment Business Limited Partnerships”, according to a report by Nikkei.
The country seems to be embracing crypto assets as a new funding method for Japanese ventures. According to experts, this move is expected to provide startups with unprecedented opportunities for growth and expansion.
Japan’s government under Prime Minister Fumio Kishida has been working on easing Web3 regulations over the past year.
The country ranks highest among regulatory-compliant places for the blockchain industry. However, these regulations seem to be quite strict in many cases. Before this announcement, the startups struggled to raise funds as they weren’t allowed to assign tokens to VCs that invested.
With the new rule coming up, Japanese ventures can easily invest in potential Web3 startups and get tokens, instead of stocks. Furthermore, startups seeking funding will now have access to a more diversified pool of investors who are not limited to traditional methods.
“Have been requesting to the Japanese government for 3 years,” Sota Watanabe, Founder of ASTAR said in a tweet. “This is a huge win. I am glad the Japanese government supports web3 startups.”
The Japanese government’s decision reflects a broader global trend. Cryptocurrencies and blockchain technology have gained significant traction as viable investment instruments. Japan is now embracing the potential of crypto assets to power its economic growth.
Still, concerns arise based on the 2017 ICO boom where people were only interested in startups for short-term gains than in supporting their long-term success. Nonetheless, the Japanese government’s decision to allow crypto fundraising comes with the understanding of the importance of regulating this space to prevent similar issues.
It will most likely involve measures to protect investors. Startups will need to meet certain criteria before conducting fundraising activities. To conclude, Japan’s decision to allow crypto fundraising aims to provide startups with alternative means of securing capital.