Japan’s newly elected Prime Minister Sanae Takaichi could open the door to more “refined” regulations to boost the country’s cryptocurrency economy, which could become the next global hub for crypto companies.
Takaichi was elected leader of the Liberal Democratic Party (LDP) on Saturday and is expected to become Japan’s first female prime minister when she takes office on October 15.
Experts believe his leadership could usher in a more open stance toward technological experimentation, including blockchain innovation, while maintaining Japan’s rigorous regulatory standards.
Takaichi’s election could have a “material impact on the perception and governance of digital assets in the country,” according to Elisenda Fabrega, general counsel of tokenization platform Brickken.
In previous public positions, Takichi has expressed support for “technological sovereignty,” including the “strategic development of digital infrastructure, including blockchain technology,” Fabrega told Cointelegraph. “From a legal perspective, this suggests that his administration could adopt a posture that is not only permissive but potentially proactive in promoting the digital economy. »
Fabrega added that Takaichi’s political positioning could strengthen Japan’s “commitment to legal certainty in the crypto space” and renew interest in the country as an innovation-friendly crypto hub.
The Japanese government recognizes blockchain as a “pillar of its digital transformation strategy,” said Maarten Henskens, chief operating officer of Startale Group and director of the Astar Foundation.
“A looser monetary outlook under the new leadership could maintain liquidity and fuel investor appetite for alternative assets, including cryptocurrencies,” Henskens told Cointelegraph.
“At Startale and Astar, we view this as a strong environment to continue to advance the Japanese Web3 ecosystem,” he added.
Related: Stimulus Talks Meet Shutdown: What Tariff-Funded Controls Could Mean for Crypto
In the election, Takaichi was the only candidate to propose both a large spending program and a looser monetary policy. His position was welcomed by voters facing the weakening Japanese yen.
The Japanese Nikkei index reached a new all-time high on Monday at 47,734.04, soaring 4.75% on the announcement of his election.
Takaichi May “Refine” Existing Token Definitions and Crypto Regulatory Frameworks
Experts say Takaichi’s administration could bring more clarity to symbolic classifications within the Japan Financial Services Agency. The FSA currently distinguishes between payment tokens, securities and utility tokens, each of which has different regulatory requirements.
According to Fabrega, Takaichi’s leadership will likely focus on “refining and expanding” existing categories, particularly those related to custody, tokenized financial instruments and investor protection standards.
“We could see the consolidation of surveillance tools related to anti-money laundering, the implementation of stricter disclosure requirements for public offerings involving digital assets, and a more structured framework for the authorization of platforms engaging in the issuance or trading of tokens.”
Japan has adopted crypto regulations since the Mount Gox collapse.
Japan has been developing its crypto regulatory framework since at least 2016, when the FSA amended the Payment Services Act (PSA) to establish a regulatory regime imposing early registration requirements for cryptocurrency exchanges.
This follows the Mount Gox merger, which exposed pressing regulatory gaps in the country.
In April 2017, the new changes came into force, requiring exchanges to register with the FSA and comply with anti-money laundering and Know Your Customer standards.
In April 2018, crypto exchanges banded together to form the Japan Virtual Currency Exchange Association (JVCEA), before the FSA granted self-regulatory status to the JVCEA in October 2018.
In June 2022, the Japanese parliament introduced new regulations allowing licensed financial institutions to issue stablecoins backed by fiat currencies, requiring issuers to fully back stablecoins with reserves held in the country in yen.
In April 2023, Japan’s LDP released a white paper outlining Web3 and blockchain adoption strategies, recommending adjustments to tax policies and approval frameworks for exchange-traded funds (ETFs).
In June, the FSA proposed reclassifying crypto assets as traditional financial products. Scheduled to come into force from 2026, this measure will subject cryptocurrencies to a new tax regime.
Related: Aging Baby Boomers and Global Wealth Drive Crypto Through 2100
Changing Japanese regulations could make the country a more attractive destination for cryptocurrency companies.
Japan’s policy shift has already helped the country double its crypto adoption in the year to September, according to Chengyi Ong, head of APAC policy at Chainalysis.
Japan saw the strongest growth among the top five markets in the Asia-Pacific region, with on-chain value received increasing more than 120% year-over-year in the 12 months to June 2025, according to an excerpt from Chainalysis’ 2025 Cryptocurrency Geography Report.
Review: Hong Kong is not the loophole Chinese crypto companies think it is