The Japanese government has recently adopted a crypto-friendly stance, announcing the loosening of restrictions on fundraising through cryptocurrency. This move marks a significant departure from the previous regulatory landscape, seeking to foster an inclusive environment conducive to the growth of businesses within the country and provide startups with more funding options.
Under this new framework, startups can secure investments in cryptocurrency through the Investment Business Limited Liability Union (LPS) fund. The Financial Services Agency (FSA) has also proposed amendments to the country’s tax law concerning digital assets. These amendments include the exemption of local businesses from the existing “unrealized gains” tax on crypto assets, making the taxation of digital assets more in line with international practices.
The primary objective of these reforms is to promote an enabling ecosystem for the development of Web3 technologies and startups leveraging blockchain advancements. These measures are expected to positively influence the cryptocurrency market in Japan, expanding the investor base and driving user adoption. Furthermore, by providing startups with additional funding options, the government seeks to foster growth and expansion within the sector.
These regulatory changes create a fertile ground for both existing cryptocurrency exchanges and emerging startups to thrive. With the newfound financial flexibility provided by crypto investments, startups gain the capacity to explore various strategies, including asset trading or deployment for specific economic use cases.
Overall, the government’s decision is expected to redefine Japan’s digital currency market, leading to a surge in trading volume and overall market activity. Ultimately, this heightened demand is expected to fuel a substantial increase in trading activity, fostering an environment conducive to the growth and evolution of established crypto firms and the emergence of new players.