Japan’s Ruling Party Pushes On-Chain Finance Plan to Protect Yen

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 “paradox” into a stronger entry point for foreign institutions.

“The momentum here cannot be ignored,” Samar Sen, head of international markets at Talos, told Decrypt. Japan’s three-bank stablecoin initiative shows the kind of bank-led effort that can move pilots into real infrastructure, he said.

Singapore and Hong Kong are further ahead on live tokenization and stablecoin activity, Sen said, but Japan “brings something different”: large financial institutions, deep capital markets and a regulatory culture focused on long-term stability.

Those countries are “moving more aggressively” on commercialization, Wish Wu, CEO and co-founder of Pharos, told Decrypt, leaving Japan’s edge dependent on how quickly it can move from policy alignment and pilots to real on-chain financial usage at scale.

Such a shift could also have broader implications for Japan’s financial system.

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 transmission after decades of near-zero rates, Al Qureshi, CEO and co-founder at Black Lake, told Decrypt.

Japan’s banking and corporate ties could help adoption if major institutions move together, Qureshi said, pointing out how execution remains a constraint, with legacy systems, manual processes and “institutional inertia” all risking delay.

Still, regulators would need to clarify how banks account for stablecoins, while tokenized deposits need a shared clearing layer between institutions, Max Grabner, head of product at Range, told Decrypt.

Japan’s “more open economy and financial system” could give it an edge over South Korea and China, he said, while foreign adoption of tokenized assets could create new demand for Japanese government bonds.