Japan is setting its sights on becoming a global leader in Web3 and blockchain technology. In a recent address at the WebX2024 conference on August 28, Prime Minister Fumio Kishida reaffirmed the government’s unwavering support for the burgeoning industry. With a series of regulatory reforms, Japan aims to create a welcoming environment for innovation in the Web3 space.

Supportive Reforms to Boost Innovation

Kishida highlighted the government’s recent tax reforms as a key part of Japan’s strategy to nurture Web3 startups. One of the most significant changes is the elimination of taxes on unrealized cryptocurrency gains, a move designed to reduce financial burdens on new companies. This reform is expected to attract both domestic and international entrepreneurs, encouraging them to contribute to Japan’s growing Web3 ecosystem.

In addition to tax changes, Japan has introduced new laws that allow limited partnership firms to invest in and hold digital assets. These legislative changes are anticipated to significantly increase domestic investment in Web3 ventures, further solidifying Japan’s position as a global hub for blockchain innovation.

Exploring the Potential of DAOs

Prime Minister Kishida also mentioned the government’s interest in decentralized autonomous organizations (DAOs), a concept gaining traction within the Web3 community. He referenced a government white paper that explores the potential of DAOs and suggests establishing a legal framework to recognize their status. This move underscores the government’s commitment to creating a supportive environment for all aspects of the Web3 industry.

Kishida connected the government’s support for Web3 to his broader “New Capitalism” policy. This policy aims to balance economic growth with social welfare by leveraging innovative technologies to tackle societal challenges. The Prime Minister emphasized that Web3 and blockchain technologies could play a crucial role in this vision by promoting financial inclusion, revitalizing the content industry, and enabling new forms of intellectual property management.

Kishida explained that “New Capitalism” is not just about economic growth but about using innovation to bring tangible improvements to people’s lives. He sees Web3 as an essential component of this strategy, with its potential to revolutionize various industries aligning with the goals of his administration’s economic reforms.

Government and Private Sector Collaboration

In his speech, Kishida praised the private sector’s rapid adoption of Web3 technologies, noting that several major corporations have already begun integrating blockchain solutions into their business models. He emphasized the government’s proactive stance, designed to complement these developments and ensure that Japan stays at the forefront of global technological innovation.

By supporting the Web3 industry, Japan is positioning itself as a leader in the next wave of digital transformation, with the potential to influence global standards and practices in blockchain and beyond.