Japan Passes Reforms to Boost Crypto and Web3 Startup Growth

Table of Contents

• Cabinet Approves VC Investment in Web3 Projects
• Boost for Crypto Startup Ecosystem
• Tax Reforms to Spur Crypto Adoption
• Prime Minister Backs Web3 Advancement

Cabinet Approves VC Investment in Web3 Projects

The Japanese cabinet recently approved proposals aimed at stimulating the development of cryptocurrency and blockchain startups in the country. The proposals include revisions to key acts like the Act on Investment Limited Partnership Agreement, allowing domestic venture capital (VC) firms to invest in Web3 startups for the first time.

This legal reform spearheaded by the Ministry of Economy, Trade and Industry (METI) seeks to increase domestic investments in virtual currency projects and foster the growth of Japan’s budding crypto and blockchain industry. According to METI reports, the approved changes will enable limited partnerships in Japan to transfer virtual currencies when receiving investments.

Boost for Crypto Startup Ecosystem

The cabinet’s approval is expected to stimulate the number of crypto and blockchain startups in Japan. Venture funding is crucial for early-stage startups, and allowing domestic VC firms to invest in virtual currency projects will help attract promising crypto projects. As one analyst noted, the move “should be a big boost for the Japanese crypto startup ecosystem.”

Tax Reforms to Spur Crypto Adoption

In another pro-crypto move, the Japanese cabinet also approved a revision to the nation’s 2024 tax regime. The changes aim to exempt corporations from paying taxes on unrealized gains from crypto held as long-term investments, according to reports. This establishes a clearer tax framework and promotes greater crypto adoption among businesses.

Prime Minister Backs Web3 Advancement

The legal and tax reforms demonstrate Japan’s growing support for cryptocurrencies and blockchain technology under Prime Minister Fumio Kishida’s leadership. Kishida views Web3 as an opportunity for economic growth and has committed to fostering an environment conducive to its advancement. With these reforms boosting the local crypto startup ecosystem, Japan appears poised to emerge as a leader in Web3 innovation in Asia.

The bill approving the above proposals has been submitted to Japan’s legislative body for further deliberation. If passed into law, the reforms are expected to fuel tremendous growth for the country’s budding cryptocurrency and blockchain industries in the coming years.

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