Japan’s newly appointed prime minister, Sanae Takaichi, is poised to introduce more “refined” regulations aimed at enhancing the nation’s cryptocurrency sector, potentially positioning it as a global hub for crypto enterprises.
Takaichi was elected as the leader of the Liberal Democratic Party (LDP) on Saturday and will become Japan’s first female prime minister when she assumes office on October 15.
Experts suggest that her leadership may pave the way for a more open approach towards technological innovation, including advancements in blockchain, while still adhering to Japan’s strict regulatory standards.
According to Elisenda Fabrega, general counsel at tokenization platform Brickken, Takaichi’s election may significantly influence the perception and governance of digital assets in Japan.
In her previous roles, Takaichi has advocated for “technological sovereignty,” emphasizing the “strategic development of digital infrastructure, including blockchain technology.” Fabrega noted to Cointelegraph that this indicates her administration could adopt a stance that is not only permissive but also proactive in fostering the digital economy.
Fabrega further remarked that Takaichi’s political stance might reinforce “Japan’s commitment to legal clarity in the crypto sector,” thereby renewing interest in the nation as an innovation-driven crypto hub.
According to Maarten Henskens, chief operating officer at Startale Group and head of Astar Foundation, Japan’s government acknowledges blockchain as a “pillar of its digital transformation strategy.”
“A more flexible monetary policy under the new administration could sustain liquidity and heighten investor interest in alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“At Startale and Astar, we view this as a promising environment to further advance Japan’s Web3 ecosystem,” he added.
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During the elections, Takaichi was the sole candidate advocating for both a significant spending package and a more relaxed monetary policy. This position has resonated with voters concerned about the declining Japanese yen.
Japan’s Nikkei index reached a record high of 47,734.04 on Monday, surging 4.75% following her election.
Takaichi may “refine” existing token definitions and crypto regulations
Experts believe that Takaichi’s administration could provide greater clarity regarding token classifications under Japan’s Financial Services Agency (FSA). The FSA currently differentiates between payment tokens, securities, and utility tokens, each with its own regulatory requirements.
Takaichi’s leadership will likely emphasize the “refinement and expansion” of existing categories, with a focus on custody, tokenized financial instruments, and investor protection standards, according to Fabrega.
“We may see the consolidation of supervisory tools related to Anti-Money Laundering, the implementation of stricter disclosure requirements for public offerings involving digital assets, and the establishment of a more structured framework for the authorization of platforms engaging in token issuance or trading.”
Japan has embraced crypto regulations since the Mt. Gox collapse
Japan has been shaping its crypto regulatory framework since at least 2016, when the FSA revised the Payment Services Act (PSA) to create a regulatory structure imposing the first registration mandates for cryptocurrency exchanges.
This initiative was a response to the collapse of Mt. Gox, which revealed critical regulatory shortcomings in the country.
In April 2017, the new amendments came into effect, requiring exchanges to register with the FSA and comply with Anti-Money Laundering and Know Your Customer standards.
In April 2018, cryptocurrency exchanges united to create the Japan Virtual Currency Exchange Association (JVCEA), which was granted self-regulatory status by the FSA in October 2018.
In June 2022, Japan’s parliament enacted new regulations permitting licensed financial institutions to issue fiat-backed stablecoins, mandating that issuers fully back these stablecoins with reserves held domestically in yen.
In April 2023, Japan’s LDP released a white paper detailing strategies for Web3 and blockchain adoption, suggesting changes to tax policies and exchange-traded fund (ETF) approval processes.
In June, the FSA proposed reclassifying crypto assets as traditional financial products, a change expected to take effect in 2026, which would introduce a new tax regime for cryptocurrencies.
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Japan’s evolving regulations could enhance the country’s attractiveness as a destination for cryptocurrency firms.
According to Chengyi Ong, Chainalysis’ APAC policy lead, Japan’s policy shift has already contributed to doubling the country’s crypto adoption over the year leading up to September.
Japan experienced the most significant growth among the five leading markets in the Asia-Pacific region, with on-chain value received rising 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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