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2022 | OriginalPaper | Chapter

11. Regulatory and Policy Reforms in Japan

Author : Hatsuru Morita

Published in: Law and Practice of Crowdfunding and Peer-to-Peer Lending in Australia, China and Japan

Publisher: Springer Nature Singapore

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Abstract

Chapter 11 discusses another way to finance small startup businesses through individual investors. Recently, initial coin offerings (ICOs) employing virtual currencies such as Bitcoin and Ethereum have been rapidly gaining attention around the world. The increasing prevalence of virtual currencies and ICOs are partly the result of these new financial instruments taking advantage of legal loopholes. However, because virtual currencies and ICOs pose novel challenges, some jurisdictions have begun to adopt new regulations. Japan is one of such jurisdictions. Section 11.1 describes the regulation and related private law rules of virtual currencies and Section 11.3 the regulation of ICOs.

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previous chapter Regulation of Crowdfunding and P2P Lending in Japan

next chapter Unique Features of Crowdfunding and P2P Lending Regulation in Australia, China and Japan

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Art. 482 of the Civil Code stipulates as follows: If an obligor, in lieu of the performance he/she originally incurred, provided any other type of performance with the acknowledgment of the obligee, such performance shall have the same effect as that of the original performance.

See Mai Ishikawa, ‘Designing Virtual Currency Regulation in Japan: Lessons from the Mt. Gox Case’ (2017) 3(1) Journal of Financial Regulation 125 for a detailed discussion.

Whether purchasing bitcoins (and other virtual currencies) can be regarded as an ‘investment’ is an issue. This is because a Bitcoin holder has no contractual claim to any future cash flow and Bitcoin has no fundamental value, unlike conventional corporate shares with dividends and residuary claims or corporate bonds with principal and interest payments. With this in mind, some argue that purchasing bitcoins is not an investment, but merely a speculation.

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Title: Regulatory and Policy Reforms in Japan
Author: Hatsuru Morita
Publisher: Springer Nature Singapore
Book: Law and Practice of Crowdfunding and Peer-to-Peer Lending in Australia, China and Japan
Print ISBN: 978-981-19-3833-7

Electronic ISBN: 978-981-19-3834-4

Copyright Year: 2022
DOI: https://doi.org/10.1007/978-981-19-3834-4_11