The proposal also pushes for tokenized bank deposits, yen-backed stablecoins, and wholesale digital currency systems connected to the Bank of Japan.
Core Policy Pillars Behind Japan’s Crypto-AI Strategy
One of the biggest parts of Japan’s new proposal is its focus on four major financial pillars designed to modernize the country’s economy through AI and blockchain infrastructure.
The LDP believes future economies will increasingly rely on AI systems making automatic financial decisions without human involvement.
Under this model, AI agents could manage inventory systems, supply chains, logistics, subscriptions, and even household purchases in real time. Blockchain technology would act as the payment and verification layer behind those automated transactions, allowing secure 24/7 machine-driven commerce.
- Tokenized Deposits and Yen Stablecoins
The proposal also pushes Japanese banks toward tokenized deposits and yen-backed stablecoins to improve payment speed and settlement efficiency. The plan encourages the Bank of Japan to accelerate experiments around wholesale digital currency systems, while commercial banks could issue tokenized deposits for large-scale business transactions operating around the clock.
Lawmakers believe stronger yen-based digital payment systems are necessary to compete with rapidly growing dollar-backed stablecoins globally.
- Foreign Stablecoin Framework
Japan is also building rules for foreign-issued stablecoins operating inside the country.
The country’s Financial Services Agency recently finalized a framework allowing approved overseas stablecoins to function as regulated electronic payment tools under Japanese law. The move could allow global stablecoin issuers to enter Japan while still remaining under domestic regulatory oversight.
The proposal additionally highlights tokenization as a major long-term growth sector for Japan’s economy. Lawmakers want blockchain systems to support tokenized real-world assets such as government bonds, real estate, receivables, and corporate financial products.
The government itself may eventually issue tokenized state bonds and distribute certain public subsidies using programmable smart contracts.
What Next?
The proposal is not yet final law, but the LDP is now expected to work alongside regulators and financial institutions to turn the framework into actionable policy over the coming years. At the same time, regulators acknowledged major challenges still remain.
The report warned about smart contract hacks, anti-money laundering concerns, privacy risks, and even future quantum computing threats that could potentially weaken current blockchain security systems.
If implemented successfully, Japan could become one of the first major economies to fully integrate AI, stablecoins, tokenized deposits, and blockchain-based finance into its national financial infrastructure.
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