Japan's Liberal Democratic Party is pushing for major cryptocurrency reforms, including a framework for digital asset ETFs and the development of yen-denominated stablecoins.
A group of lawmakers from the LDP's Parliamentary Association for the Promotion of Blockchain submitted recommendations to Finance Minister Satsuki Katayama on Monday. The proposals cover stablecoins, ETFs, central bank digital currencies, and blockchain applications.
The document also recommends doubling the leverage cap for retail crypto derivatives trading.
Finance Minister Katayama responded by saying Japan must move forward without falling behind global developments, referencing crypto legislation in the United States.
This comes two months after Japan approved classifying crypto assets as financial instruments. The Financial Services Agency is reportedly planning to amend regulations to allow crypto ETFs.
Japan's potential entry into the $320 billion stablecoin market follows US lawmakers enacting the GENIUS Act for a payment stablecoin framework. Currently, yen-denominated stablecoins represent less than 0.01% of the market.
Separately, prediction market platform Polymarket is reportedly seeking approval to operate in Japan by 2030, though strict gambling laws may pose challenges.