Japan’s newly elected Prime Minister, Sanae Takaichi, could pave the way for “refined” regulations aimed at boosting the country’s cryptocurrency economy, potentially positioning Japan as a leading global hub for crypto businesses.
Takaichi, elected leader of the Liberal Democratic Party (LDP) on Saturday, is set to become Japan’s first female prime minister when she assumes office on Oct. 15.
Experts suggest her leadership may bring a more open approach to technological innovation, including blockchain development, while upholding Japan’s strict regulatory framework.
“Elisenda Fabrega, general counsel at tokenization platform Brickken, said Takaichi’s election could have a ‘material impact on the perception and governance of digital assets within the country.’”
In her previous public roles, Takaichi has advocated for “technological sovereignty” and the “strategic development of digital infrastructure, including blockchain technology,” Fabrega told Cointelegraph. “Legally, this indicates that her administration may not only be permissive but could actively promote the growth of the digital economy.”
Fabrega added that Takaichi’s leadership may reinforce “Japan’s commitment to legal certainty in the crypto space” and renew global interest in the country as an innovation-friendly hub for cryptocurrencies.
Japan’s government is increasingly recognizing blockchain as a “pillar of its digital transformation strategy,” said Maarten Henskens, COO at Startale Group and head of Astar Foundation.
“A more flexible monetary approach under the new leadership could sustain liquidity and boost investor appetite for alternative assets, including cryptocurrencies,” Henskens told Cointelegraph. “At Startale and Astar, we see this as an ideal environment to further develop Japan’s Web3 ecosystem.”
During the elections, Takaichi was the only candidate advocating both a major spending package and looser monetary policy—a stance that has resonated with voters amid a weakening yen. Following her election, Japan’s Nikkei index surged to a record high of 47,734.04 on Monday, climbing 4.75%.
Experts also anticipate that Takaichi may “refine” Japan’s existing crypto regulations. Her administration could clarify token classifications under the Financial Services Agency (FSA), which currently differentiates between payment tokens, securities, and utility tokens—each subject to distinct regulatory standards.
According to Elisenda Fabrega of Brickken, Takaichi is likely to focus on the “refinement and expansion” of these categories, particularly regarding custody, tokenized financial instruments, and investor protection.
“We may see the consolidation of supervisory tools related to Anti-Money Laundering, the implementation of more strict 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 steadily developed its cryptocurrency regulatory framework since at least 2016, when the Financial Services Agency (FSA) amended the Payment Services Act (PSA) to impose the first registration requirements on cryptocurrency exchanges. These changes were prompted by the Mt. Gox meltdown, which exposed significant gaps in the country’s oversight of digital assets.
In April 2017, the amendments came into effect, requiring exchanges to register with the FSA and comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) standards.
By April 2018, Japanese crypto exchanges established the Japan Virtual Currency Exchange Association (JVCEA), which was granted self-regulatory status by the FSA in October of the same year.
In June 2022, Japan introduced new regulations allowing licensed financial institutions to issue fiat-backed stablecoins, mandating that these stablecoins be fully backed by reserves held domestically in yen.
The following year, in April 2023, the ruling Liberal Democratic Party (LDP) released a white paper outlining strategies for Web3 and blockchain adoption, including proposed adjustments to tax policies and frameworks for approving exchange-traded funds (ETFs).
In June 2023, the FSA proposed reclassifying crypto assets as traditional financial products. Set to take effect in 2026, this change would subject cryptocurrencies to a new tax regime.
Japan’s evolving regulatory landscape could position the country as an increasingly attractive destination for cryptocurrency firms.
Japan’s policy changes have already contributed to a surge in cryptocurrency adoption, doubling usage in the year leading up to September, according to Chengyi Ong, APAC policy lead at Chainalysis.
Among the five leading markets in the Asia-Pacific region, Japan experienced the fastest growth, with on-chain value received increasing more than 120% year-on-year in the 12 months ending June 2025, according to the Chainalysis 2025 Geography of Cryptocurrency report.
