New Japan PM to boost crypto economy, ‘refine’ blockchain regulations
News Summary
Japan's newly elected Prime Minister, Sanae Takaichi, may open the door for more “refined” regulations to boost the country’s cryptocurrency economy, potentially positioning Japan as the next global hub for crypto firms. Takaichi was elected as the leader of the Liberal Democratic Party (LDP) on Saturday and is set to become Japan’s first female prime minister on Oct. 15. Experts suggest her leadership could introduce a more open stance toward technological experimentation, including blockchain innovation, while maintaining Japan’s rigorous regulatory standards. According to Elisenda Fabrega, general counsel at Brickken, Takaichi has previously expressed support for “technological sovereignty,” including the “strategic development of digital infrastructure, including blockchain technology.” This indicates her administration may proactively promote the digital economy. Maarten Henskens, COO of Startale Group, added that a looser monetary outlook under the new leadership could sustain liquidity and fuel investor appetite for alternative assets, including cryptocurrencies. Takaichi's platform, which included a major spending package and looser monetary policy amid a weakening yen, was well-received by voters. Following news of her election, Japan's Nikkei index surged 4.75% to a new all-time high.
Background
Japan has been steadily developing its cryptocurrency regulatory framework since at least 2016, following the Mt. Gox meltdown, which led the Financial Services Agency (FSA) to amend the Payment Services Act (PSA) to establish registration requirements for cryptocurrency exchanges. In April 2017, new amendments took effect, requiring exchanges to register with the FSA and comply with Anti-Money Laundering and Know Your Customer standards. In 2018, the Japan Virtual Currency Exchange Association (JVCEA) was formed and subsequently granted self-regulatory status by the FSA later that year. In recent years, Japan's regulations have continued to evolve. 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, the LDP issued a white paper outlining strategies for Web3 and blockchain adoption, recommending adjustments in tax policies and ETF approval frameworks. In June 2025, the FSA proposed reclassifying crypto assets as traditional financial products, expected to take effect from 2026, which would subject cryptocurrencies to a new tax regime.
In-Depth AI Insights
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