[NEWS] Japanese government approves bill to allow LPS to acquire and hold crypto assets

On the 16th, the Ministry of Economy, Trade and Industry announced that the Cabinet had approved the "Bill to partially revise the Act on Strengthening Industrial Competitiveness to Promote the Creation of New Businesses and Investment in Industry."

The bill includes a measure to add crypto assets (virtual currencies) to the assets that LPS can acquire and hold through the "Partial Amendment of the Act on Limited Partnership (LPS) Contracts for Investment."

In April last year, the Ministry of Economy, Trade and Industry published a notice clarifying the interpretation of the fact that LPS can invest in security tokens. Under the previous Act on LPS Contracts (LPS Act), the investment targets of LPS were limited to those that contribute to the promotion of smooth capital supply to businesses.

In response to the increase in Web 3.0 startups

The purpose of this bill is to expand strategic domestic investment, provide large-scale and long-term tax measures for investment and production in strategic fields, and promote innovation and metabolism that will lead to increased domestic investment.

Under the current regulations, LPS are not permitted to hold crypto assets, and Web 3.0 projects that aim to raise funds using many tokens have had to seek support from overseas VCs. However, the amendment to the law will allow domestic VCs to invest in Web 3.0 projects, which could greatly contribute to the birth of new startups. Regarding the acquisition and holding of crypto assets by LPS, the Japan Cryptocurrency Business Association (JCBA) also announced a proposal in December last year.

If the amendment bill is passed and enacted by the Diet, LPS, which have previously been limited to specific assets, will be able to invest in the Web 3.0 field, expanding their options.

Japan is accelerating the promotion of Web 3.0

The government has positioned Web 3.0 as one of its national strategies, and is working to create an environment to make Japan a global hub for blockchain by revising existing regulations, which have been a major barrier to entry for capital inflows. In June last year, stable coins were smoothly distributed in Japan, tax reforms for crypto assets were implemented, and the distribution and framework of security tokens were also considered.

In addition, the "FY2024 Tax Reform Outline" compiled last year includes provisions to ease the requirements for cryptocurrency-related taxation for corporations, following the 2022 reform.

Reference: METI
Image: Shutterstock

Related articles

LDP and Komeito announce "FY2024 Tax Reform Outline"; partial revision of cryptocurrency taxation for corporations

48 OECD member countries, including Japan, sign international agreement to combat cryptocurrency tax evasion