Japan greenlights bill allowing investment firms to hold crypto

The Japanese government approved a bill that permits Investment Limited Partnerships to acquire and hold crypto, indicating a shift in the country’s regulatory framework towards digital currencies.

The Cabinet sanctioned the bill on Feb. 16. It is part of a broader legislative proposal to enhance Japan’s industrial competitiveness.

It includes measures such as tax incentives and financial support targeted at strategic sectors like electric vehicles, green technologies, and semiconductors. The proposal will now be deliberated in the Diet, Japan’s national legislature, during its 213th Ordinary Session.

Crypto in investment strategies

Primarily, the bill seeks to stimulate business creation and strategic investment across various sectors, including technology and green energy.

Under the new legislation, investment limited partnerships, which are instrumental in private equity, venture capital, and real estate investments, will now include crypto in their portfolios.

The inclusion of digital assets is particularly noteworthy, given Japan’s historically cautious regulatory approach to the industry. By integrating crypto into legal investment frameworks, Japan aims to adapt its economic strategies to the digital age, positioning itself as an active participant in the global digital assets market.

The bill also introduces several initiatives to foster innovation and strategic investments.

Fostering innovation

The initiatives include support for domestic production in strategic sectors, an innovation box tax system to incentivize intellectual property usage, and the extension of the Industrial Innovation Investment Corporation’s (JIC) operation until March 2050.

Additionally, the legislation introduces measures to support startups, including a flexible stock option pool and enhanced collaboration between companies and universities through standardization and intellectual property utilization.

With the Diet session running until June 23, 2024, there is a timeframe for the proposed legislation to undergo review and possible enactment.

This legislative action is part of Japan’s broader strategy to enhance economic growth through innovation, strategic investment, and integration of digital technologies into its industrial and financial sectors.