• Japan eyes support for crypto startups in new regulation on startup financing.
• According to reports, the new rules means startups can raise funds from investors by offering stocks and crypto.

Japan is looking to relax restrictions on how startups raise funds with a view to revamping the sector amid growth in venture capital funding.

According to a report from local outlet Nikkei, the government plans to have startups access financing from VCs by offering crypto. As such, the new regulation will allow investors to receive traditional stocks as well as crypto when extending funding to startups.

Blockchain reporter Colin Wu shared the news via X.

According to nikkei, the Japanese government will relax regulations on startup financing. When start-ups receive financial support from investment funds, they can choose to deliver crypto assets instead of just stocks. The new rules apply to funds investing in limited…

— Wu Blockchain (@WuBlockchain) September 15, 2023

The country’s regulatory approach will however apply to funds that invest in limited partnerships (LPs), the report stated. Japan’s growing support for crypto comes as several countries look to boost the investment space to accommodate a burgeoning crypto sector.

But regulators have in recent months also stepped up their crackdown on compliance, including the enforcement of the Travel Rule that mandates the sharing of customer transaction details between crypto exchanges. The rules are aimed at bolstering the fight against potential money laundering.

Japanese-based crypto exchange bitFlyer announced the implementation of the travel rule in May this year.