4 - 7 minute read
Japan’s regulatory and political environment for crypto and Web3 technologies has been evolving rapidly over the past several years. In December 2022, the Financial Services Agency of Japan announced its plans to lift restrictions on foreign-issued stablecoins in Japanese exchanges, which could have significant implications for the decentralized finance (DeFi) ecosystem in Japan and the wider region. Additionally, the Japanese government’s announcement that it plans to invest in nonfungible tokens (NFTs) and the metaverse highlights the increasing recognition of the potential of Web3 technologies to transform various sectors of society and the economy.
On the backdrop of these significant strides for blockchain and cryptocurrency, industry insiders from around the world gathered at the historic Kanda Myojin Shrine in Tokyo for DAO Tokyo 2023, a conference focused on decentralized autonomous organizations (DAOs) and organized by Fracton Ventures. The lineup of keynote speakers spanned various sectors of the DAO ecosystem, including ENS DAO, which manages the Ethereum Name Service, Shibuya, a decentralized social media platform, and the dYdX Foundation, an independent foundation dedicated to decentralized exchange dYdX.
Speakers discussed the importance of DAOs as a new paradigm for organizational governance and decision-making, and their potential to transform the art world, promote decentralized creativity, and empower local businesses and residents. DAO Tokyo featured numerous panel discussions where participants discussed the importance of creating decentralized systems prioritizing user privacy and control, and the potential for Web3 to enable new forms of value creation and monetization.
The panelists also discussed the potential of blockchain technology to enable new forms of trust and collaboration, particularly in industries such as finance and supply chain management. They highlighted the potential for DeFi to transform the financial industry and the challenges of regulatory compliance. In addition to the insightful panel discussions and keynote speeches, the DAO Tokyo conference also featured a range of other activities that highlighted the potential of decentralized tech, including a campaign to mint Kanda Myojin augmented reality NFTs designed to commemorate the conference.
It was interesting to watch how at this global event — with 90% of the audience being from outside Japan — the only people exchanging physical business cards were Japanese, symbolizing how the most recent trends come to Japan later than the rest of the globe and highlighting how Japanese society respects its traditions.
When asked why he wanted to participate in the event, Makoto Inoue, a core developer at Ethereum Name Service, noted that ENS was impressed by the vitality of the community at the previous DAO NYC event in New York and wanted to contribute to the success of the first full-fledged DAO event in Asia by sponsoring it. He also highlighted the potential of DAOs to manage projects such as DeFi and NFTs, and said that he hoped more tools would emerge to make participation easier. Makoto noted that the cryptocurrency industry is going through a winter season, but this is an opportunity for new projects to emerge.
Patrick Rawson, co-founder of Curve Labs, told Cointelegraph that the dominance of Western DAOs is set to change as Asia gains momentum in the Web3 space. He said that Asia would become increasingly involved in the Web3 space as Western jurisdictions like the United States face regulatory challenges and Asian developers become increasingly involved in the blockchain and crypto industries.
DAO Tokyo was a reminder of the energy and creativity driving the Web3 industry forward, and of Japan’s position at the forefront of this new frontier. With a growing ecosystem of blockchain startups, investors, and enthusiasts, Japan is poised to become a major player in the Web3 world. The Japan Business Federation, also known as Keidanren, recently made a proposal that aims to make Japan a leading Web3 advanced country by 2025 by addressing various issues, such as decentralized data ownership, governance transformation, and innovation in various industries.
Keidanren listed three areas Japan could address to become a Web3 advanced country: appropriate tax measures for token ownership, revision of the law on investment business limited liability partnership agreements, and appropriate operation of the Japan Virtual Currency Exchange Association audit. The federation also proposed measures for NFTs, DAOs, and the metaverse. Japan will host several more large-scale Web3-focused conferences this summer, with Prime Minister Fumio Kishida already confirmed as a speaker at some.
The Bottom Line
Japan’s regulatory and political environment for crypto and Web3 technologies is rapidly evolving, with the country poised to become a major player in the Web3 world. The recent announcement by the Financial Services Agency of Japan to lift restrictions on foreign-issued stablecoins in Japanese exchanges, and the government’s plans to invest in NFTs and the metaverse, highlights Japan’s increasing recognition of the potential of Web3 technologies. The recent DAO Tokyo 2023 conference focused on decentralized autonomous organizations and showcased the importance of DAOs as a new paradigm for organizational governance and decision-making. With a growing ecosystem of blockchain startups, investors, and enthusiasts, Japan is set to become a leading Web3 advanced country by 2025. Traders should keep an eye on Japan’s Web3 developments and the potential opportunities and risks they may present.
