A Look at Japan’s Strategic Vision and Industrial Goals for Blockchain with Hashed and Oasys

Jack R. Mitchell

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. 

A_futuristic_scene_depicting_Japan's_strategic_vision_and_industrial

Few seem better placed to tackle this topic than HOR, the think tank of prolific Asian crypto VC Hashed, and Oasys, one of the region’s most successful blockchain projects. 

Entitled ‘Background and Features of Japan’s Web3.0 Policy Initiative’, the 28-page report suggests we should all pay close attention to the country’s attempts to make blockchain part of its “strategic industrial policy.” Not least because these attempts have already borne fruit: in the span of just two years, Japan has become a global leader in the web3 domain, say the authors. 

Web3: A Pillar of Japan’s “New Capitalism Policy”

The fact that the government of the world’s third-largest economy is positive about web3 technology (the Ministry of Economy, Trade and Industry even has its own Web3 Policy Office) should be viewed as a major win for the industry as a whole. The Japanese government’s “open attitude towards cryptocurrencies and blockchain technology” is a theme that recurs again and again in the report.

Starting with the publication of regulatory guidelines for stablecoins in June 2022, Japan has been on a mission to nurture crypto projects, including those in the crypto gaming and DeFi sectors. While major banks like MUFG, Mizuho, and SMBC have pursued stablecoin issuance, a February 2024 amendment to 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 is said to believe DAOs could be an effective means of addressing various social issues within the country.

Much of the report is given over to an interview between HOR’s Head of Research Miseon Lee and Dominic Jang, Head of Business Development at Oasys, with the pair discussing topics such as regulations, the growth potential of blockchain gaming, the acceleration of DAOs within Japan, and the current state of web3 research. 

“The Japanese government considers it a priority to understand why Web3 is necessary for Japanese society,” states Jang during the interview, pointing out that investment in web3 is regarded as a key pillar of the ruling government’s New Capitalism Policy. 

Per this policy, investment in startups is anticipated to increase more than tenfold by 2027, resulting in the creation of 100 world-class unicorn companies and 100,000 new startups. “The number of Web3 startups will also increase rapidly along with this trend,” predicts Jang.

This growth will at least partly be funded by VCs as a result of the Japanese government’s relaxing of rules around Limited Partnership Funds’ ability to acquire and hold crypto assets. Moreover, recent tax reforms now exempt companies from paying taxes on unrealized gains of issued crypto assets, encouraging more web3 projects at the local level.

Gaming a Key Driver of Blockchain Push

Beyond Japan’s borders, many overseas projects and VCs have started to enter the market, hiring local talent, opening offices in the country, or bootstrapping projects already based there. 

Much of this investment has been centered on blockchain gaming, perhaps unsurprising given the country’s rich video gaming history through world-renowned companies such as Nintendo, Sega, and Bandai Namco Entertainment.

On this topic, Jang is well qualified to give his view. In the report, he references 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 that front, the Kishida government’s support of greater integration of blockchain into the content industry, and the leveraging of Japan’s strong intellectual property in manga, gaming, and animation, is noted. 

An EVM-compatible public blockchain, Oasys has been strengthening its presence in the Japanese market in recent years, onboarding numerous titles from major game companies and collaborating with the likes of Sega, Square Enix, and Com2uS. One of its latest games ‘Captain Tsubasa – Rivals’ leverages the IP of hit Japanese manga franchise Captain Tsubasa, which has sold over 70 million copies globally. 

This transforming of a hit IP into a blockchain-powered game is something we are likely to see more and more, as it offers the opportunity to bring franchise fans on-chain.

“Japanese IPs hold significant potential at the intersection of NFTs and gaming,” Jang observes. “If competitive and well-known IPs enter this market, there is a real possibility of attracting a massive user base to follow suit.”

Ultimately, Japan’s clear regulatory framework, coupled with its strong developer and entrepreneur community, makes it an obvious rising star in the world of web3. Will the government succeed in creating 100 world-class unicorns over the next three years? And if so, how many of them will operate in the cryptosphere? Given enthusiasm at the government level, you would not bet against Japan spearheading Asia’s web3 revolution. 

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

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