Japan backs Cryptocurrencies, embraces Web 3.0

Japan backs Cryptocurrencies, embraces Web 3.0

Recent years have seen major global developments related to Web 3.0, a decentralized application environment using new technologies, as well as worldviews built based on the environment. New services and tools have started to emerge for such elements as finance, assets and transactions and organizations, which are the core elements in economic society, and they seem to have the potential to technologically supplement the roles played by existing services and tools.

The list of services and tools argued about Web 3.0 includes crypto assets, decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), the metaverse, etc. These services and tools have different benefits, risks, and problems. Countries across the globe are progressively and efficiently working for the secure implementation of technology.

On Thursday, at the NexTech Week trade show organized in Tokyo, Masaaki Taira, a lawmaker in the ruling Liberal Democratic Party and head of its Web 3.0 project team, said that Japan has progressive ideas on Blockchain and plans to extend the technology in the country.

Japan’s government and Prime Minister Fumio Kishida have favoured emerging technology, and Web 3.0 in particular, as pillars of the country’s economic future. This is at a time when U.S. cryptocurrency exchanges are being hit with lawsuits that are generating regulatory turmoil and doubts about the country’s Web3 future. It is quite interesting to note that the U.S. and Japan are joining hands at an international multilateral forum (QUAD) for enhancing supply chains and trade relations in the country.

Taira, a cryptocurrency advocate, used his presentation on national strategies for emerging technologies to highlight Japan’s capabilities in Web3, or the vision of a new Internet built around decentralized blockchain technologies, the metaverse, and non-fungible tokens (NFTs). Japan’s government-affiliated white paper released set out the country’s path to widespread adoption of Web3 that includes crypto.

It is crucial to note, Japan understands that the blockchain has the potential to generate significant economic value, particularly in the cultural and economic areas where the country has strength. It expects that the use of tokens such as NFTs and fan tokens enables securing additional revenue sources for IP holders, creators, and other stakeholders, retention of loyal fans, and in turn, revitalization of industries in the cultural and economic areas.

Japan is also considering it important to establish an environment where Japan has strength. Furthermore, the metaverse has now made possible the distribution of intangible objects whose value was difficult to determine. Thus, the form and means of distribution of value have been changing. It is expected that, through such developments, communities that have been increasingly divided along with the development of information and communication technologies are to be connected soon and create new value, once again. Ultimately, there is the possibility that in the future the concepts of individual free will may change, as seen in cases where a person may use multiple bodies or multiple persons may share one body; under such circumstances, value, ownership, and transactions may be redefined.

At the event, Taira pointed out that Japan’s experimentation with stablecoins is bearing fruit, the government advisory body is investigating ways to connect public and private blockchains for greater scalability. Further, Japan’s historical soft power strengths in anime, manga and gaming lend themselves well to the Web3 space, particularly in the sphere of NFTs and metaverse development, two areas full of potential value that have yet to be adequately explored.

Japan, at the same time, is aware of the difficulties in establishing the technology. A paper published mentions that in the Web3.0 world where technologies and business environments change quickly, from the perspective of promoting innovations, it is important to clarify the areas controlled by hard laws, consider how the country should form flexible rules including soft laws, and immediately create a mechanism in which related parties repeatedly verify and revise the rules periodically.

In the Web 3.0 world where cross-border activities are common, it is important to build globally accepted rules and consensus, instead of taking classic approaches to national laws and multilateral conventions. As a prerequisite, it is also important to have a viewpoint of ensuring the comparability of regulations of different countries. On the other hand, there is a growing area for blockchain-based services and tools that are difficult to control by laws and regulations alone, which points to the necessity of reconsidering their enforceability and the role of regulations, these include issues related to ownership and decentralization.

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