Japan’s New Prime Minister May Boost Crypto Economy and Refine Blockchain Regulations
Japan’s newly elected prime minister, Sanae Takaichi, is expected to introduce more “refined” regulations to boost the country’s cryptocurrency economy, potentially establishing Japan as the next global hub for crypto companies. Takaichi’s election as the leader of the Liberal Democratic Party (LDP) on Saturday marks a significant milestone, as she is set to become Japan’s first female prime minister when she takes office on October 15.
Experts believe that Takaichi’s leadership may bring a more open stance towards technological experimentation, including blockchain innovation, while maintaining Japan’s rigorous regulatory standards. According to Elisenda Fabrega, general counsel at tokenization platform Brickken, Takaichi’s election may have a “material impact on the perception and governance of digital assets within the country.” Fabrega notes that Takaichi has expressed support for “technological sovereignty,” including the “strategic development of digital infrastructure, including blockchain technology,” which suggests that her administration may adopt a proactive approach to promoting the digital economy.
Japan’s Commitment to Blockchain and Crypto Regulations
Japan’s government has been recognizing blockchain as a “pillar of its digital transformation strategy,” according to Maarten Henskens, chief operating officer at Startale Group and head of Astar Foundation. Henskens notes that a looser monetary outlook under the new leadership could sustain liquidity and fuel investor appetite for alternative assets, including cryptocurrencies. This could create a strong environment for advancing Japan’s Web3 ecosystem.
During the elections, Takaichi was the only candidate proposing both a major spending package and looser monetary policy, which has been well received by voters facing a weakening Japanese yen. Japan’s Nikkei index rose to a new all-time high of 47,734.04 on Monday, soaring 4.75% on the news of her election.
Refining Existing Token Definitions and Crypto Regulatory Frameworks
Experts say that Takaichi’s administration could bring greater clarity to token classifications under Japan’s Financial Services Agency (FSA). The FSA currently distinguishes between payment tokens, securities, and utility tokens, each with different regulatory requirements. Takaichi’s leadership will likely focus on the “refinement and expansion” of existing categories, particularly related to custody, tokenized financial instruments, and investor protection standards.
According to Fabrega, this may involve the consolidation of supervisory tools related to Anti-Money Laundering, the implementation of more strict disclosure requirements for public offerings involving digital assets, and a more structured framework for the authorization of platforms engaging in token issuance or trading.
Japan’s Evolution of Crypto Regulations
Japan has been developing its crypto regulatory framework since at least 2016, when the FSA amended the Payment Services Act (PSA) to establish a regulatory regime imposing the first registration requirements for cryptocurrency exchanges. This came in response to the meltdown of Mt. Gox, which exposed pressing regulatory gaps in the country.
In April 2017, the new amendments took effect, requiring exchanges to register with the FSA and comply with Anti-Money Laundering and Know Your Customer standards. In April 2018, crypto exchanges came together to form the Japan Virtual Currency Exchange Association (JVCEA), prior to the FSA granting the JVCEA self-regulatory status in October 2018.
In June 2022, Japan’s parliament introduced new regulations allowing licensed financial institutions to issue fiat-backed stablecoins, requiring issuers to fully back stablecoins with reserves held domestically in yen. In April 2023, Japan’s LDP issued a white paper outlining strategies for Web3 and blockchain adoption, recommending adjustments in tax policies and exchange-traded fund (ETF) approval frameworks.
Japan’s evolving regulations could make the country a more attractive destination for cryptocurrency firms. According to Chainalysis’ APAC policy lead, Chengyi Ong, Japan saw the strongest growth among the five leading markets in the Asia-Pacific region, with onchain value received growing over 120% year-on-year in the 12 months to June 2025.
Read the original article at Cointelegraph.
