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A Look at Japan’s Strategic Vision and Industry Goals for Blockchain with Hashed and Oasys
A recent report co-authored by Hashed Open Research (HOR) and leading gaming-focused blockchain Oasys sought to better understand the Japanese government’s approach to web3.
Few seem better placed to address this topic than HOR, the think tank of the prolific Asian cryptocurrency VC HashingAND Oasisone of the most successful blockchain projects in the region.
Titled “Context and Characteristics of Japan’s Web3.0 Policy Initiative,” the 28-page report suggests that we should all pay close attention to the country’s attempts to make blockchain part of its “strategic industrial policy.” Also because these attempts have already borne fruit: in the space of just two years, Japan has become a world leader in the web3 domain, say the authors.
Web3: a pillar of Japan’s “new capitalist policy”.
The fact that the government of the world’s third largest economy has a positive attitude towards web3 technology (the Ministry of Economy, Trade and Industry even has its own Web3 Policy Office) should be seen as a great victory for the whole sector. The Japanese government’s “open attitude towards cryptocurrencies and blockchain technology” is a theme that recurs again and again in the report.
Since the publication of regulatory guidelines for stablecoins in June 2022, Japan has committed to cultivating crypto projects, including those in the crypto gaming and DeFi sectors. While major banks such as MUFG, Mizuho and SMBC have pursued stablecoin issuance, a February 2024 amendment the Financial Instruments and Exchange Act officially recognized the legal status of DAOs, promoting their operation and participation.
Interestingly, Prime Minister Fumio Kishida’s government believes that DAOs could be an effective means of addressing various social issues within the country.
Much of the report is dedicated to an interview between HOR head of research Miseon Lee and Dominic Jang, head of business development at Oasys, with the two discussing topics such as regulations, the growth potential of blockchain games, the acceleration of DAOs in Japan and the current state of web3 search.
“The Japanese government makes it a priority to understand why Web3 is necessary for Japanese society,” Jang says during the interview, underlining that investment in web3 is considered a key pillar of the ruling government’s new capitalism policy.
Under this policy, investments in startups are expected to increase more than tenfold by 2027, resulting in the creation of 100 world-class unicorn companies and 100,000 new startups. “Hand in hand with this trend, the number of Web3 startups will also rapidly increase,” Jang predicts.
This growth will be at least partly financed by VCs following the Japanese government’s easing of rules on the ability of limited partnership funds to acquire and hold crypto assets. Additionally, recent tax reforms now exempt companies from paying taxes on unrealized gains from issued cryptocurrencies, encouraging more web3 projects locally.
Gaming is a key factor in the push of Blockchain
Beyond Japan’s borders, many foreign projects and VCs have started to enter the market, hiring local talent, opening offices in the country, or starting projects already based there.
Much of this investment has been focused on blockchain gaming, perhaps unsurprising given the country’s rich gaming history through world-renowned companies such as Nintendo, Sega and Bandai Namco Entertainment.
On this topic Jang is well qualified to express his point of view. In the report, he refers to a meeting earlier this year, when the government invited companies at the forefront of web3 – including Oasys – to share the current state of the blockchain gaming market and discuss its potential and initiatives .
On this front, we highlight the Kishida government’s support for greater integration of blockchain into the content industry and the exploitation of Japan’s strong intellectual property in manga, games and animation.
Oasys, an EVM-compatible public blockchain, has strengthened its presence in the Japanese market in recent years, integrating numerous titles from major gaming companies and collaborating with the likes of Sega, Square Enix and Com2uS. One of his last games’Captain Tsubasa – Rivalsleverages the IP of the popular Japanese manga franchise Captain Tsubasa, which has sold over 70 million copies worldwide.
This transformation of a successful IP into a blockchain-based game is something we are likely to see more and more of, as it offers the opportunity to bring fans of the franchise on-chain.
“Japanese IPs have significant potential at the intersection of NFTs and gaming,” notes Jang. “If competitive and well-known IPs enter this market, there is a real possibility of attracting a huge user base that will follow suit.”
Ultimately, Japan’s clear regulatory framework, coupled with its strong community of developers and entrepreneurs, makes it an obvious rising star in the world of web3. Can the government create 100 world-class unicorns in the next three years? And if so, how many of them will operate in the cryptosphere? Given the enthusiasm at the government level, you wouldn’t bet against Japan leading the web3 revolution in Asia.
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