Japan’s newly appointed prime minister, Sanae Takaichi, is poised to usher in more “refined” regulations aimed at enhancing the country’s cryptocurrency sector, which could become a leading global hub for crypto firms.
Takaichi was elected as the head of the Liberal Democratic Party (LDP) on Saturday and is slated to be Japan’s first female prime minister when she assumes office on Oct. 15.
Analysts suggest that her leadership might pave the way for a more welcoming approach to technological innovation, including advancements in blockchain, while still upholding Japan’s strict regulatory standards.
Takaichi’s election could significantly influence the perception and governance of digital assets domestically, as noted by Elisenda Fabrega, general counsel at tokenization platform Brickken.
In her past public roles, Takaichi has voiced support for “technological sovereignty,” highlighting the need for the “strategic development of digital infrastructure, including blockchain technology,” Fabrega shared with Cointelegraph. “Legally, this indicates her administration may take a stance that is not just permissive but potentially proactive in bolstering the digital economy.”
Fabrega further mentioned that Takaichi’s political approach could reinforce “Japan’s commitment to legal clarity in the crypto sector” and revive interest in the nation as an innovation-friendly crypto environment.
Japan’s government is acknowledging blockchain as a “pillar of its digital transformation strategy,” remarked Maarten Henskens, chief operating officer at Startale Group and head of Astar Foundation.
“A more lenient monetary policy under the new leadership could maintain liquidity and boost investor interest in alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“At Startale and Astar, we view this as an encouraging environment to further develop Japan’s Web3 ecosystem,” he added.
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Throughout the elections, Takaichi was the sole candidate advocating for both a significant spending package and a more relaxed monetary policy. Her position has been positively received by voters concerned about a declining Japanese yen.
Japan’s Nikkei index hit a record high of 47,734.04 on Monday, surging 4.75% following the announcement of her election.
Takaichi may “refine” existing token definitions, crypto regulatory frameworks
Experts believe Takaichi’s administration could bring more clarity to token classifications under Japan’s Financial Services Agency. The FSA currently differentiates between payment tokens, securities, and utility tokens, each subject to distinct regulatory frameworks.
Takaichi’s leadership will likely center on the “refinement and expansion” of existing categories, especially in areas like custody, tokenized financial instruments, and investor protection standards, according to Fabrega.
“We may observe the consolidation of supervisory tools concerning Anti-Money Laundering, stricter disclosure requirements for public offerings involving digital assets, and a more organized framework for authorizing platforms engaged in token issuance or trading.”
Japan embraces crypto regulations since Mt. Gox collapse
Japan has been shaping its crypto regulatory framework since at least 2016, when the FSA amended the Payment Services Act (PSA) to put in place a regulatory regime that imposed the first registration requirements for cryptocurrency exchanges.
This was in response to the collapse of Mt. Gox, which revealed critical regulatory shortcomings in the country.
In April 2017, the new amendments came into effect, mandating exchanges to register with the FSA and adhere to Anti-Money Laundering and Know Your Customer standards.
In April 2018, crypto exchanges united to form the Japan Virtual Currency Exchange Association (JVCEA), before the FSA granted the JVCEA self-regulatory status in October 2018.
In June 2022, Japan’s parliament enacted new regulations permitting licensed financial institutions to issue fiat-backed stablecoins, stipulating that issuers must fully back stablecoins with reserves held in yen domestically.
In April 2023, Japan’s LDP released a white paper outlining strategies for Web3 and blockchain integration, suggesting modifications in tax policies and exchange-traded fund (ETF) approval processes.
In June of this year, the FSA proposed reclassifying crypto assets as traditional financial products. This new framework is expected to take effect in 2026, subjecting cryptocurrencies to a new tax regime.
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Japan’s evolving regulations could turn the country into a more appealing location for cryptocurrency firms.
Japan’s policy shift has already contributed to the country doubling its crypto adoption in the year leading up to September, according to Chainalysis’ APAC policy lead, Chengyi Ong.
Japan experienced the highest growth among the five leading markets in the Asia Pacific region, with onchain value received increasing over 120% year-on-year in the 12 months to June 2025, as noted in Chainalysis’ 2025 Geography of Cryptocurrency Report.
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