A village in Japan has recently shown interest in using the Initial Coin Offering (ICO) crowd-funding mechanism in a bid to boost its finances.
Japanese Village considers the use of ICO to revitalize the region
The village is Nishiawakura, located in the Aida district of the Okyama Prefecture of Japan with a population of some 1,437 residents. The village’s local administrative authority announced that it has begun exploring the possibility of raising private capital for the purposes of supporting local government.
Struggling with current attempts to revitalise the region, a proposition was put forward by one local representative to consider an ICO-type venture in raising the funds necessary for projects that are seeking long-term sustainable community development.
Current research into private capital finance is being conducted in collaboration with a number of private firms who are said to be seriously considering the proposition of a municipal ICO as an innovative source of finance for the village.
Private Enterprise Demonstrating Enthusiasm
Two private companies have stepped forward as potential candidates for managing any eventual ICO. ChainTope Inc is a Blockchain technology development and IT consulting company. It focuses specifically on the application of blockchain development within the public sphere.
Its general remit is to migrate aspects of public services to the Blockchain when doing so is seemed an appropriate fit in the provision of public services. It is hoping to serve as a consultative model for similar engagements internationally.
Village Ceremony Co Ltd, another potential partner in the project, will likely be employed in its usual capacity as a provider/creator of e-commerce platforms as the village seeks to engage in more trade with foreign partners.
Japanese ICOs Growing in Popularity
The Nishiawakura initiative appears to be part of a growing ICO trend in Japan as a series of companies both large and small have recently declared their own intentions to go with an ICO crowdfund. Japan has been seen in months as adopting a more open attitude to the ICO model in relation to some of its Asian neighbours, specifically China and South Korea, who have implemented formal bans although, in both cases, it remains unclear if these are permanent or not.
As of writing (November 2017), there are no specific laws governing ICOs although the Financial Services Agency (FSA) of Japan has stated that two existing laws may apply to token sales: “ICOs may fall within the scope of the Payment Services Act and/or the Financial Instruments and Exchange Act depending on how they are structured,” the agency detailed in a recent statement. These generally imply legal recourse for investors if an ICO is seen to behave in a manner that is inimical to its clients’ interests.
The Japan Blockchain Alliance (JBA) has published its own set of guidelines for Initial Coin Offerings (ICOs) for Japanese residents.
In October, it had been briefly speculated that a ban might be imposed on ICOs in Japan in the wake of China’s own ban although it is generally now thought that the Chinese decision may have encouraged a Japanese reversal in attitude in a country where chronic economic stagnation is crying out for innovative answers.