Japan’s Ministry of Economy, Trade, and Industry (METI) just approved a bill that will open up more investments in Web3 and crypto assets. The bill, which is aimed at promoting new businesses and industries by increasing domestic investments, is an amendment to four Acts — most notable the Act on Investment Limited Partnership Agreements.
The amendment will allow Japanese limited partnership firms (LPs) to invest in startups and medium-sized companies with cryptocurrencies in exchange for a share of the venture’s profits. Previously, Japanese venture capital (VC) firms were not allowed to invest using cryptocurrencies, leading to many Web3 startups seeking investors from abroad. The latest move will likely lead to a rise in blockchain and crypto companies in the island nation.
According to Hiro Kunimitsu, the founder and CEO of Gumi Inc., a game development firm with its own blockchain investment fund, the new amendment “will be a big opportunity for many Web3 startups from Japan.”
The other three other amendments include the Industrial Competitiveness Enhancement Act, the New Energy and Industrial Technology Development Organization Act, and the Industrial Property Information and Training Center Act — all of which are aimed at promoting innovation and domestic investments.
The Prime Minister of Japan, Fumio Kishida, has been bullish on Web3 since 2022. In December of last year, the Japanese cabinet gave the green light to a revision of its tax system, potentially exempting companies from paying taxes on unrealized profits from cryptocurrencies.
Japan Continues its Bullishness in Web3
In October 2022, the Japanese Prime Minister delivered a speech where he told the country the government is investing in a plethora of Web3 technologies, including NFTs, the metaverse, and blockchain. Since then, we’ve seen a myriad of Japanese companies investing in the latest iteration of the internet.
Here are some of the top headlines from Web3 in Japan:
- February 2024. Japan Airlines & Hakuhodo Reveal NFTs Linked to IRL Experiences
- December 2023. J1 Japanese Soccer Team Uruwa Reds Enters Its NFT Era
- September 2023. Honda & Animoca Brands Bring NFTs to F1 Japan GP
- June 2023. Japan’s All Nippon Airways Creates NFT Marketplace
- November 2022. Japan’s Largest Bank is Headed for the Metaverse
- March 2023. Japan’s Top Firms Team Up for Metaverse
- January 2023. Japan to Provide Metaverse Classes to Curb Absenteeism
- October 2022. Japan’s Top Telecom Company Invests in Metaverse
Recently, Japan shocked the world when its economy unexpectedly slipped into a recession after shrinking for a second quarter and experiencing three consecutive declines in domestic demand. As a result, Germany has taken the position of the world’s third largest economy.
While many speculate that the bad news could cause the Bank of Japan to revise its ultra-loose monetary policies that have been in affect for a decade, that remains uncertain. What is clear is that with the latest amendment to the Act on Investment Limited Partnership Agreements, the country is taking clear-cut action to boost domestic Web3 investments and businesses.
In other words, Japan and its forward-thinking Prime Minister are bullish on Web3 — and that’s good news for the space as a whole.