Japan Opens Doors to Cryptocurrency Funding for Startups

Japan is embracing a new approach to fundraising for startups by allowing them to raise public funds using cryptocurrencies instead of traditional stocks. This shift is in response to the evolving landscape of digital assets and investment opportunities. The government is relaxing regulations on financing startups, enabling them to receive investment in the form of crypto assets (virtual currencies) rather than stocks.

For some time, Japan has been relatively conservative in embracing cryptocurrencies and blockchain technology compared to other countries. However, recent developments suggest a growing openness to digital assets within the nation. The Financial Services Agency (FSA), Japan’s primary financial regulatory authority, proposed amendments to the tax code related to cryptocurrencies on August 31. This reflects Japan’s willingness to play a more active role in cryptocurrency regulation.

The proposed amendments aim to exempt local businesses from the year-end “unrealized gains” tax on cryptocurrencies, creating more favorable conditions for crypto-related activities. Prime Minister Fumio Kishida expressed Japan’s commitment to fostering the Web3 industry during a keynote address at the WebX conference in Tokyo. He emphasized the transformative potential of Web3 technologies in reshaping the internet and driving social change, reaffirming the government’s dedication to supporting its growth.

In another significant development, leading cryptocurrency exchange Binance has announced its intention to serve Japanese crypto users starting in August. This decision follows Binance’s acquisition of the local exchange platform Sakura Exchange in November 2022, which marked its reentry into the Japanese market.

Overall, Japan’s increasing openness to digital assets signals a significant step in the evolution of cryptocurrencies within the country. These changes provide startups with new avenues for fundraising and further establish Japan as a player in the cryptocurrency and blockchain space.

– Investment Business Limited Partnerships (LPS): A specific category of funds that are subject to certain regulations regarding investments and partnerships.
– Unrealized gains: The increase in the value of an investment that has not yet been sold.

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