The Japanese government is reportedly considering promoting the use of non-fungible tokens (NFTs) within the sports sector.
As Nikkei has detailed, this potential move might come in the wake of the ruling Liberal Democratic Party Web3 “Digital Society Promotion” team releasing a white paper addressing the topic.
While the white paper is still in the works, insiders seem to have shared in-depth information about it with the media.
Nikkei further elucidated that the forthcoming white paper aims to provide clarity on the regulatory framework for companies issuing NFTs and their prospective collaborators in the sports industry.
How Could Japan Use NFTs in Sport – And What Are The Problems?
The Web3 team highlighted the rising global popularity of “fantasy sports” and expressed a desire to motivate local companies to venture into this domain.
Given the immense popularity of sports such as baseball and football (soccer) in Japan, the potential launch of an NFT-backed fantasy league in the country would likely be a significant hit.
Nonetheless, the stringent anti-gambling regulations in Japan might pose challenges. The Japanese legal framework prohibits most commercial ventures that collect stake money from its participants.
The practice of requiring participants to pay “entry fees” by some NFT-powered fantasy sports platforms may be at odds with Japan’s regulations, given the country’s stringent anti-gambling stance.
Collaborating with foreign firms may further complicate matters. As elucidated by the Japanese media platform, CoinPost:
“When a Japanese sports entity grants a license to an international business operator, and it becomes evident that this license facilitates gambling, the entity might be implicated in aiding and abetting gambling activities.”
To navigate these legal constraints, the forthcoming white paper is anticipated to suggest companies to solicit sponsors for furnishing prize money and other rewards, thereby sidestepping the direct collection of entry fees from participants.
The forthcoming paper aims to provide clearer insights into the regulatory landscape for NFT operators and sports franchises.
Additionally, the team is advocating for the creation of an “industry group” dedicated to entities employing NFTs. They urge a collaborative effort between the public and private sectors to devise comprehensive guidelines.
The Web3 team collaborates closely with a specialized NFT task force, initiated in 2022.
About a year prior, this team proposed the idea of designating a Web3-specific ministerial position in Tokyo.
Prime Minister Fumio Kishida has consistently emphasized the potential and importance of nurturing Japan’s blockchain, metaverse, NFT, and cryptocurrency sectors. His dedication to fostering Web3-centric business growth was highlighted during a discussion with investors from the UK in the previous year.