On Friday Japan’s Cabinet approved a Bill, the Industrial Competitiveness Enhancement Act. Assuming the legislation passes, one of the clauses will allow limited liability partnerships (LLPs) to invest in crypto asset tokens. Most venture capital (VC) firms are LLPs.
Last year we reported that the plans were in progress. At the time, there was a discussion about dropping the requirement for LLPs to invest half their assets domestically. We don’t believe that is part of the bill.
The fact that VCs have been prevented from investing directly in tokens may have discouraged some VCs from investing in web3. However, those focusing on the sector will have found workarounds. It may have encouraged some to push their investments outside of Japan. For example, SBI set up a fund in Singapore, and Nomura’s digital asset arm Laser Digital is based in Switzerland.
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