Japan’s Ruling Party Pushes On-Chain Finance Plan to Protect Yen
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Japan’s ruling Liberal Democratic Party is pushing stablecoins, tokenized deposits and blockchain settlement as financial infrastructure, warning that Japan risks falling behind foreign payment systems.
Key facts
Tokyo’s bet is that a conservative, fully KYC’d stack can become a 24/7 system “scalable enough” for both money-laundering and securities regulators, Chu said, turning Japan’s overseas capital
Japan isn’t freelancing here,” Joshua Chu, lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, told Decrypt
Stablecoins could serve as “a programmable layer for money movement and liquidity distribution” in Japan, increasing “settlement velocity” and giving banks a new channel for monetary policy
To get there, the country’s central bank needs to study tokenized current account deposits, including a wholesale CBDC, while officials review bank-issued stablecoins, cross-border yen stablecoin
Summary
Japan’s ruling LDP party has put forward a proposal framing on-chain finance as a way to protect yen sovereignty. It seeks clearer rules for payroll, taxes, bank-issued stablecoins, and tokenized deposit settlement. Japan has the banks, capital and regulatory trust to compete, but execution remains the test, Decrypt was told. The proposal asks the Financial Services Agency to draw up a five-year roadmap, position finance as Japan’s 18th growth investment field, and clarify how stablecoins could be used for payroll, tax payments, corporate funding and cross-border transfers.