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Japan Cabinet Approves Proposal to Allow VCs to Invest in Crypto Startups

Jonathan Wong

Jonathan Wong

19 February 2024

The Japanese cabinet has approved a proposal to add cryptocurrencies to the list of assets that local investment limited partnerships can acquire or hold, allowing venture capital firms like gumi Cryptos Capital to invest in crypto and Web3 startups. This is part of Prime Minister Fumio Kishida's new capitalism policy to cultivate the Web3 industry.

Under the approved revision, VCs will be able to invest in projects that only issue cryptocurrencies, providing support for local startups and medium-sized companies. The bill has been submitted to the legislative body and will undergo deliberation.

Japanese crypto projects previously had to source capital from foreign venture capitals, creating a funding obstacle. With this approval, Japanese VCs now have the opportunity to invest in Web3 startups, potentially boosting the local crypto industry.

In December, the Japanese cabinet also approved a revision to its tax regime that could exclude companies from paying taxes on unrealized profits from crypto, further supporting the growth of the crypto and Web3 industry in Japan.