Japan’s newly elected prime minister, Sanae Takaichi, may pave the way for more “refined” regulations to enhance the nation’s cryptocurrency economy, positioning it as a potential global hub for crypto enterprises.
Takaichi was elected leader of the Liberal Democratic Party (LDP) on Saturday and is poised to become Japan’s first female prime minister when she assumes office on Oct. 15.
Experts believe her leadership may foster a more open approach to technological experimentation, including blockchain advancement, while upholding Japan’s stringent regulatory standards.
Takaichi’s election may significantly influence the perception and governance of digital assets in the country, according to Elisenda Fabrega, general counsel at tokenization platform Brickken.
In prior public roles, Takaichi has advocated for “technological sovereignty,” emphasizing the “strategic development of digital infrastructure, including blockchain technology,” Fabrega stated to Cointelegraph. “From a legal perspective, this implies that her administration may take a stance that is not only permissive but potentially proactive in promoting the digital economy.”
Fabrega further noted that Takaichi’s political orientation might enhance “Japan’s commitment to legal certainty in the crypto space” and rekindle interest in the nation as an innovation-friendly crypto hub.
Japan’s government is recognizing 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 flexible monetary policy under the new leadership could sustain liquidity and stimulate investor interest in alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“At Startale and Astar, we perceive this as a favorable environment to further develop Japan’s Web3 ecosystem,” he added.
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During the elections, Takaichi was the only candidate advocating both a significant spending initiative and a more lenient monetary policy. Her proposals have resonated well with voters dealing with a declining Japanese yen.
Japan’s Nikkei index climbed to a new record high of 47,734.04 on Monday, surging 4.75% following the news of her election.
Takaichi may “refine” existing token definitions, crypto regulatory frameworks
Experts suggest Takaichi’s administration could bring greater 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 requirements.
Takaichi’s leadership is expected to emphasize the “refinement and expansion” of existing categories, particularly in areas related to custody, tokenized financial instruments, and investor protection standards, according to Fabrega.
“We may observe the consolidation of supervisory tools concerning Anti-Money Laundering, the introduction of stricter disclosure requirements for public offerings involving digital assets, and a more structured framework for the authorization of platforms engaging in token issuance or trading.”
Japan has embraced 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 implement the first registration requirements for cryptocurrency exchanges.
This move followed the Mt. Gox collapse, which highlighted critical regulatory deficiencies within the country.
In April 2017, the new amendments were enacted, mandating exchanges to register with the FSA and comply with Anti-Money Laundering and Know Your Customer requirements.
In April 2018, crypto exchanges collaborated to establish the Japan Virtual Currency Exchange Association (JVCEA), which the FSA granted self-regulatory status in October 2018.
In June 2022, Japan’s parliament introduced new regulations permitting licensed financial institutions to issue fiat-backed stablecoins, necessitating 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 adjustments in tax policies and exchange-traded fund (ETF) approval frameworks.
In June, the FSA proposed reclassifying crypto assets as traditional financial products, with expected implementation from 2026, subjecting cryptocurrencies to a new tax structure.
Related: Aging boomers and global wealth seen boosting crypto until 2100
Japan’s evolving regulations could enhance the country’s appeal as a destination for cryptocurrency firms.
Japan’s policy shift has already facilitated a twofold increase in the nation’s crypto adoption over the year leading to September, according to Chainalysis’ APAC policy lead, Chengyi Ong.
Japan experienced the most substantial growth among the five leading markets in the Asia-Pacific region, with onchain value received growing 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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