Opening
Japan's ruling Liberal Democratic Party (LDP) announced policy recommendations on June 19 to establish stablecoins and tokenized deposits as national financial infrastructure. The recommendations, finalized at the party's 5th project team meeting on June 12 and approved by the LDP Policy Research Council, are being coordinated for inclusion in the 'Basic Policy on Economic and Fiscal Management and Reform (Koutaihoushishin) 2026,' expected to be decided by Cabinet in June. The proposal designates on-chain finance—encompassing stablecoins and tokenized deposits—as a core component of Japan's next-generation financial infrastructure, emphasizing the need for institutional reforms and expanded public-private investment.
## Policy Recommendations Overview
The LDP's recommendations position on-chain finance as Japan's "18th growth investment sector," placing it alongside artificial intelligence, semiconductors, quantum technology, and aerospace. The Financial Services Agency (FSA) is tasked with developing a five-year roadmap, while public-private cooperation will drive investment expansion and adoption policies.
The recommendations include tokenization of Bank of Japan (BOJ) current account deposits. The project team requested that the BOJ clarify relevant issues and present a concrete implementation timeline within the year.
## Stablecoin and Tokenization Measures
For stablecoins, the recommendations address legal framework requirements for use in salary payments and tax collection. The proposals call for accelerating the review of bank-issued stablecoins and advancing international interoperability for cross-border payments.
## Stock Market and Settlement Infrastructure
The recommendations highlight the Tokyo Stock Exchange's annual trading volume of 1,600 trillion yen, noting that on-chain payment infrastructure will become critical for implementing T+0 (same-day) settlement systems in the stock market.
## Asia-Led Cooperation Framework
The LDP proposes establishing an "AI·On-chain Finance Asia Policy Dialogue Framework" to build Asia-led on-chain finance cooperation. The framework aims to standardize interoperability rules in areas including real-world assets (RWA), know-your-customer (KYC) procedures, and anti-money laundering (AML) measures, positioning Japan to lead Asia's financial infrastructure development.
## Project Team Background
The project team was launched in March under the leadership of Diet member Daira Masaaki. Kihara Seiji, chair of the LDP's Blockchain Promotion Lawmakers Federation, serves as the project team's chair.
