Japan Prepares New Rules to Boost Crypto Asset Investment

Japan has a domestic crypto investment contract. (Photo; Doc. Coiningeek)

JAKARTA - Japan, one of the developed countries in Asia, is preparing new regulations that will facilitate investment in crypto assets by venture companies and other entities.

A draft law proposed by Japan's Ministry of Economy, Trade and Industry on Friday, February 16, 2024 would allow limited investment partnerships to own and hold crypto assets. A limited investment partnership is a business form commonly used for venture capital, real estate investment, and venture capital investment.

This draft law is part of an economic reform package aimed at encouraging the creation of new businesses and strategic domestic investment. The Japanese government also provides tax incentives and other financial support for specific purposes, such as research and development, digitalization, and the green transition.

By accommodating crypto assets within the legal framework, Japan shows its commitment to following developments in the global digital economy. Crypto assets are considered a potential and innovative investment instrument, which can provide benefits for developers and investors.

Sota Watanabe, founder of Astar Network, a layer-1 blockchain popular in Japan, said that the new rules will provide a boost to the national crypto industry. He said that many venture companies and startups were interested in investing in crypto assets, but were hampered by strict and unclear regulations.

"This is an important step to enrich and nurture the national industry," Watanabe told Blockworks, a leading crypto media. "Notably, this issue has long been a risk factor cited by VCs and startups."

Watanabe added that politicians in Japan have gained accurate knowledge about crypto assets and are moving towards easing regulations. He said that this change was the result of collaboration between the government and the private sector, which benefited all parties.

The bill now heads to the Diet, Japan's national parliament, for discussion and passage. The current Diet session runs through June 23, 2024, but legislators can choose to transfer bills, which do not expire automatically as might happen in the US Congress at the end of a two-year cycle.

Japan is one of the most friendly countries for crypto assets in the world. The country has recognized crypto assets as legal tender since 2017 and has a comprehensive regulatory framework for crypto exchanges. According to data from CoinMarketCap, Japan has more than 20 crypto exchanges operating legally, including BitFlyer, Coincheck, Liquid, and Bitbank.

Japan also has a large and active crypto community, consisting of developers, investors, users and enthusiasts. Some well-known crypto projects originating from Japan include Cardano, NEM, Polkadot, Astar Network, and MonaCoin.