Despite 13 Japan’s fintech sector is experiencing rapid growth Japan’s fintech sector is experiencing rapid growth, driven by digital transformation and a tech-savvy population. Key areas such as blockchain, payment systems, and digital banking offer substantial growth potential. Japan has taken a proactive approach to cryptocurrency regulation, fostering a favorable environment for blockchain-based solutions. The rise of digital payment platforms like PayPay creates opportunities for foreign investors to collaborate with local firms in this dynamic sector. While these industries present significant opportunities, foreign investors should be mindful of challenges such as stricter foreign direct investment (FDI) regulations and increasingly active investment screening by the Japanese government.” How would you describe the start-up ecosystem in Tokyo, and across Japan? Mr. Tokura explains: “Japan’s start-up ecosystem has undergone a remarkable transformation, with Tokyo emerging as a prominent global innovation hub. The Tokyo Metropolitan Government’s initiatives and activities, such as “Startup Ecosystem Tokyo Consortium” and “SusHi Tech Tokyo,” have played a pivotal role in fostering collaboration among academia, government, business corporations and startups. Beyond Tokyo, regional cities like Osaka and Fukuoka are gaining momentum as emerging start-up hubs, offering lower operational costs and tailored support for entrepreneurs. However, challenges persist. Japan’s access to venture capital remains limited compared to global hubs like Silicon Valley, and cultural factors such as risk aversion continue to influence entrepreneurial activity. Nevertheless, government-backed initiatives and corporate accelerator programs are gradually enhancing funding opportunities and fostering innovation across the ecosystem.”
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