Japan’s ruling Liberal Democratic Party is pushing stablecoins, tokenized deposits and blockchain settlement as financial infrastructure, warning that Japan risks falling behind foreign payment systems.
The proposal asks the Financial Services Agency to draw up a five-year roadmap, position finance as Japan’s 18th growth investment field, and clarify how stablecoins could be used for payroll, tax payments, corporate funding and cross-border transfers. “The accumulation of such efforts will help secure Japan’s on-chain financial sovereignty and safeguard its monetary sovereignty,” a rough translation of the proposal reads
Drafts were prepared by a digital policy working group within the LDP, chaired by party lawmaker Seiji Kihara, after meetings with banks, stablecoin issuers, tokenization firms, regulators and academics from March. The party’s Policy Research Council formally approved it Tuesday. To get there, the country’s central bank needs to study tokenized current account deposits, including a wholesale CBDC, while officials review bank-issued stablecoins, cross-border yen stablecoin use, and shared Asian rules for tokenized assets, audits, KYC, AML and counter-terrorist financing, the proposal reads.
Building on momentum Industry observers said the proposal would place Japan’s crypto policy inside familiar financial guardrails, instead of a looser market experiment. “Japan isn’t freelancing here,” Joshua Chu, lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, told Decrypt. The country’s push for on-chain finance would operate under regulated money movement and market structure “wrapped in code,” he added. Tokyo’s bet is that a conservative, fully KYC’d stack can become a 24/7 system “scalable enough” for both money-laundering and securities regulators, Chu said, turning Japan’s overseas capital “paradox” into a stronger entry point for foreign institutions. “The momentum here cannot be ignored,” Samar Sen, head of international markets at…