Japan is opening up new fundraising avenues for startups by allowing them to issue crypto assets instead of stocks. The new rules apply specifically to Investment Business Limited Partnerships (LPS).
The move, reported by Japanese financial news site Nikkei, signals a shift in the country’s stance on cryptocurrencies. Japan has lagged behind others in embracing digital assets, but recent developments indicate it is now taking a more active regulatory role.
In August, Japan’s Financial Services Agency (FSA) proposed amending the tax code to exempt businesses from paying tax on unrealized crypto gains annually. Earlier this month, Prime Minister Fumio Kishida reaffirmed Japan’s commitment to developing the Web3 space during a speech at the WebX conference in Tokyo.
The new crypto fundraising rules for startups come at a pivotal time. In November 2022, Binance acquired Japanese exchange Sakura Exchange Bitcoin and confirmed it will resume services in the country this month.
Japan’s crypto industry has criticized prior regulatory uncertainty. The new fundraising policy and recent FSA tax move suggests Japan aims to become more crypto-friendly. Time will tell if the rules provide meaningful fundraising access for Japanese startups.
