The Japanese Embrace Crypto Tokens for Public Funding
Startups in Japan can now issue crypto tokens instead of stocks when seeking public funding. This move aims to provide new businesses with diversified income streams.
New Regulations Boost Crypto Adoption
Japan is known for having one of the most mature crypto regulatory frameworks globally. It introduced stablecoin legislation in June, allowing banks, money transfer agents, and trust companies to issue tokens.
If you want to learn more about stablecoins, check out our comprehensive guide.
Danny Chong from Tranchess, a decentralized finance yield platform, mentioned that yen-backed stablecoins are becoming increasingly popular, with $500 billion in transaction volume so far. Additionally, dollar-based stablecoins have gained a positive reputation due to PayPal’s PYUSD asset launch.
Binance recently obtained a license to operate in Japan after meeting the government’s revised requirements. The exchange faced regulatory scrutiny in the US for mishandling customer funds, which prompted its expansion into Asia.
ICO Equity Financing Contrasts with US SEC
Japan’s new rules on equity financing differ from those in the United States.
A judge recently ruled that Ripple Labs’ sales of XRP violated US securities law. The US Securities and Exchange Commission (SEC) has consistently cracked down on projects that sell tokens without proper registration.
To understand more about initial coin offerings (ICOs), click here.
The SEC has faced criticism for taking enforcement actions without providing clear guidelines for token registration. Industry players have requested clearer regulations to determine which tokens are securities, but the agency believes existing rules are sufficient.
In the US, lawmakers have proposed various bills to bring clarity to the industry. Some proposals suggest that both the SEC and the US Commodity and Futures Trading Commission share oversight of the crypto industry.
Hot Take: Japan Leads the Way in Crypto Financing
Japan’s decision to allow startups to issue crypto tokens for public funding showcases its forward-thinking approach to the crypto industry. By diversifying income streams, new businesses have more opportunities to thrive. This move, along with Japan’s mature regulatory framework, positions the country as a leader in crypto adoption.
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