Japan’s newly elected prime minister, Sanae Takaichi, may pave the way for more “refined” regulations to enhance the country’s cryptocurrency ecosystem, positioning it as a potential global hub for crypto businesses.
Takaichi was elected leader of the Liberal Democratic Party (LDP) on Saturday and is slated to become Japan’s first female prime minister when she assumes office on Oct. 15.
Experts suggest that her leadership could foster a more open attitude toward technological innovation, including advancements in blockchain, while adhering to Japan’s strict regulatory framework.
Takaichi’s election may significantly influence the perception and governance of digital assets within Japan, according to Elisenda Fabrega, general counsel at the tokenization platform Brickken.
In previous roles, Takaichi has voiced support for “technological sovereignty,” emphasizing the “strategic advancement of digital infrastructure, including blockchain technology,” Fabrega informed Cointelegraph. “From a legal standpoint, this indicates that her administration may adopt a stance that is not only permissive but also possibly proactive in fostering the digital economy.”
Fabrega noted that Takaichi’s political stance may reinforce “Japan’s commitment to legal clarity in the crypto sector” and rekindle interest in the nation as a crypto-friendly innovation center.
Japan’s government is acknowledging blockchain as a “pillar of its digital transformation strategy,” stated Maarten Henskens, chief operating officer at Startale Group and head of Astar Foundation.
“A more lenient monetary policy under the new leadership could enhance liquidity and stimulate interest in alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“At Startale and Astar, we view this as a robust environment for propelling Japan’s Web3 ecosystem forward,” he added.
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During the elections, Takaichi was the only candidate advocating for both a significant spending plan and relaxed monetary policy. Her position has resonated well with voters grappling with a declining Japanese yen.
Japan’s Nikkei index surged to a new record of 47,734.04 on Monday, climbing 4.75% following her election news.
Takaichi may “refine” existing token definitions, crypto regulatory frameworks
Experts indicate that Takaichi’s administration could provide more clarity regarding token classifications under Japan’s Financial Services Agency. The FSA currently differentiates between payment tokens, securities, and utility tokens, each subject to distinct regulatory obligations.
Takaichi’s leadership will likely prioritize the “refinement and expansion” of existing categories, particularly concerning custody, tokenized financial instruments, and investor protection standards, as noted by Fabrega.
“We may witness the unification of supervisory tools related to Anti-Money Laundering, the introduction of stricter disclosure requirements for public offerings involving digital assets, and a more organized framework for authorizing platforms engaged in token issuance or trading.”
Japan has embraced crypto regulations since Mt. Gox collapse
Japan has been enhancing its crypto regulatory framework since at least 2016, when the FSA amended the Payment Services Act (PSA) to establish a regime introducing the initial registration requirements for cryptocurrency exchanges.
This action followed the collapse of Mt. Gox, which revealed critical regulatory deficiencies in the country.
By April 2017, new amendments were in effect, mandating 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), before the FSA granted the JVCEA self-regulatory status in October of the same year.
In June 2022, Japan’s parliament enacted 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 published a white paper outlining strategies for Web3 and blockchain adoption, recommending changes in tax policies and exchange-traded fund (ETF) approval processes.
In June, the FSA proposed reclassifying crypto assets as conventional financial products. Expected to be implemented by 2026, this will subject cryptocurrencies to a new tax regime.
Related: Aging boomers and global wealth seen boosting crypto until 2100
Japan’s evolving regulatory landscape could enhance the country’s appeal as a destination for cryptocurrency firms.
Japan’s policy shift has already facilitated the country’s doubling of crypto adoption over the year leading up to September, according to Chainalysis’ APAC policy lead, Chengyi Ong.
Japan recorded the highest growth among the top five markets in the Asia-Pacific region, with on-chain value received increasing over 120% year-on-year in the 12 months to June 2025, per an excerpt from Chainalysis’ 2025 Geography of Cryptocurrency Report.
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