Some of the largest banks in Japan are proposing to provide substantial funds to fintech start-ups after the law that prevented them from owning more than 5% stake in a technology company was abolished. The change in the law was part of an effort to encourage financial technology in the country in the light of fears that the Silicon Valley could finish Japan’s banking sector. According to Naoyuki Iwashita, head of FinTech Center at Bank of Japan, the country’s institutions are concerned that a Google Bank or Facebook Bank will conquer Japan. The new development could lead to Japan becoming a major source of funding for fintech startups in Asia. The change in the law means banks can ignore a 5% limit on stakes in non-financial companies if their purpose is to apply information technology to finance.
