By permitting start-ups to raise public capital through the sale of cryptocurrencies instead of traditional stocks, Japan is poised to transform its financial environment. This courageous move represents Japan’s dedication to promoting the Web3 industry and is a part of a larger initiative to embrace the digital assets revolution that has been sweeping the globe.
Japanese financial authorities have recognized the need to adapt to the changing financial landscape. The country’s primary financial regulatory authority, the Financial Services Agency (FSA), recently made a significant move on August 31st, aiming to amend the tax code related to cryptocurrencies. The primary goal? Exempting local businesses from the year-end “unrealized gains” tax on cryptocurrencies, a move that demonstrates Japan’s willingness to embrace and support cryptocurrency adoption.
This development comes as Japan’s Prime Minister, Fumio Kishida, reaffirms the nation’s commitment to nurturing the Web3 industry. In a keynote address at the WebX conference in Tokyo, he emphasized the transformative potential of Web3 to revolutionize the internet and ignite social change, aligning Japan with the global push toward decentralized technologies.
Moreover, the private sector is already making waves in Japan’s evolving crypto landscape. Binance, one of the world’s largest cryptocurrency exchanges, confirmed its reentry into Japan by offering its services to Japanese cryptocurrency users starting in August. This strategic move followed Binance’s acquisition of Sakura Exchange Bitcoin (SEBC), a Japanese-registered crypto exchange service provider, in November 2022. This acquisition not only signaled Binance’s return but also paved the way for enhanced crypto accessibility within Japan.
The introduction of cryptocurrency-based fundraising for start-ups, particularly through Investment Business Limited Partnerships (LPS), marks a pivotal moment in Japan’s financial history. This approach diversifies funding options for emerging businesses, potentially democratizing investment opportunities and fostering innovation.
This shift towards cryptocurrency fundraising represents Japan’s determination to not only catch up with the global cryptocurrency trend but to lead it. By supporting local businesses and entrepreneurs with favorable tax policies and regulatory frameworks, Japan is positioning itself as a hub for crypto innovation and investment in the coming years.