A Pro-Crypto Leader Takes Japan’s Helm
Japan’s new Prime Minister Sanae Takaichi is expected to bring a transformative shift to the nation’s digital economy, particularly in blockchain regulation and cryptocurrency policy. Her election on October 15 marks a turning point for Japan — one that could open the door to more refined, innovation-friendly crypto frameworks.
Takaichi, who was elected as leader of the ruling Liberal Democratic Party (LDP), has long advocated for “technological sovereignty” and strategic digital infrastructure, including blockchain. According to Elisenda Fabrega, general counsel at tokenization platform Brickken, Takaichi’s administration may “adopt a posture that is not only permissive but potentially proactive in promoting the digital economy.”
A Looser Economic Outlook and Crypto Momentum
Experts suggest that Takaichi’s economic stance — which includes a major spending package and looser monetary policy - could fuel liquidity and investor appetite for digital assets like Bitcoin and Ethereum.
He added that the new administration’s policies could further strengthen Japan’s Web3 ecosystem, making it an attractive hub for global crypto companies.
Following her election, Japan’s Nikkei index soared 4.75%, reaching a record 47,734.04, signaling strong market optimism. Analysts believe a more flexible monetary stance could indirectly support greater crypto inflows and innovation in DeFi and tokenized finance.
Refining Token Rules Under Japan’s FSA
One of the biggest expected changes under Takaichi’s leadership involves redefining token classifications under the Financial Services Agency (FSA). Currently, Japan divides crypto assets into payment tokens, utility tokens, and securities, each governed by distinct regulatory requirements.
Fabrega said the new administration could lead to “refinement and expansion” of these categories - particularly around custody, tokenized financial instruments, and investor protection.
Such changes could enhance legal clarity while maintaining Japan’s strong consumer protection and anti-money-laundering (AML) standards.
A Decade of Hard Lessons: From Mt. Gox to Maturity
Japan’s crypto regulations have evolved significantly since the collapse of Mt. Gox in 2014 — an event that exposed major oversight gaps. The Payment Services Act (PSA) was amended in 2016, requiring crypto exchanges to register with the FSA and comply with KYC/AML standards.
In 2018, exchanges formed the Japan Virtual Currency Exchange Association (JVCEA), later granted self-regulatory authority. In 2022, Japan approved stablecoin legislation, mandating full domestic yen reserves for issuers.
More recently, in April 2023, the LDP released a Web3 white paper, urging reforms in tax policy and ETF approvals. The FSA’s June 2025 proposal to reclassify cryptocurrencies as traditional financial products - effective from 2026 - aims to create a more robust tax and reporting framework.
Japan’s Crypto Adoption Surges
According to Chainalysis’ 2025 Geography of Cryptocurrency Report, Japan has become one of Asia’s fastest-growing crypto markets, with on-chain value received growing 120% year-over-year as of June 2025.
The data suggests Japan’s regulatory clarity and innovation-friendly approach are already paying dividends.
Under Takaichi’s leadership, experts expect Japan to refine its rules further - not to stifle innovation, but to set a global benchmark for balanced crypto governance.
If she delivers, Japan may soon reclaim its place as a leader in blockchain innovation, blending its disciplined financial structure with the open spirit of Web3.
