Japan’s new government policy allows startups to sell crypto instead of stock to raise capital
The Japanese government has just announced a significant easing of laws around startup financing, which is huge news for the cryptocurrency sector. This change makes it possible for entrepreneurs to take digital assets instead of stocks.
A Japanese news site said that this regulation change is an attempt to make Japan a more welcoming place for startups by expanding their access to capital and bringing the country in line with global norms for dealing with digital currencies.
Investments in the form of cryptocurrency may now be made to companies through a new fund known as the Investment Business Limited Liability Union (LPS). According to the document, the LPS fund has many sections whose only purpose is to purchase stocks from new companies.
In a similar move, on August 31 the Financial Services Agency (FSA), Japan’s major financial regulatory body, proposed to change the tax legislation in regard to digital currencies.
The proposed change by the FSA would save domestic corporations the “unrealized gains” tax now levied at the end of each fiscal year on cryptocurrency profits. Legal entities in Japan must pay yearly taxes on their digital asset holdings whether or not they sell or convert their cryptocurrency into conventional cash.
The revised FSA guidelines are intended to put Japan in line with other nations that only tax crypto assets upon conversion to fiat money.
The FSA hopes to encourage the development of Web3 technologies and firms that use blockchain by exempting them from the “unrealized gains” tax.
The idea has received praise from the Department of Commerce and Industry, which bodes well for its eventual approval.
If adopted, This change has the potential to significantly impact the Japanese digital economy, helping to foster startup growth and blockchain-related innovation.
The Japanese cryptocurrency industry might be greatly affected by the government’s recent decision to recognize cryptocurrency as a valid investment option for businesses.
To start, these changes may make the market more accessible by attracting a wider range of investors. More people, such as individual investors and crypto fans, may be interested in contributing to startups if they are easier to access.
The liquidity of businesses that get crypto financing may also improve. They may easily convert these assets into cash or use them for other endeavors, opening them new avenues for development and expansion.
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