New Japan Leadership Promises Refined Approach To Blockchain Economy
According to Cointelegraph, Sanae Takaichi was elected leader of Japan's Liberal Democratic Party on October 4, 2025. She is set to become the country's first female prime minister when she takes office on October 15. Takaichi previously expressed support for technological sovereignty and strategic development of digital infrastructure, including blockchain technology.
Experts say her administration may introduce a more open stance toward technological experimentation while maintaining Japan's regulatory standards. Elisenda Fabrega, general counsel at tokenization platform Brickken, told Cointelegraph that Takaichi's leadership may have a material impact on digital asset governance within the country. Japan's Nikkei index rose 4.75% to a record high of 47,734.04 on Monday following news of her election.
Takaichi's political positioning may strengthen Japan's commitment to legal certainty in the crypto space. During elections, she was the only candidate proposing both a major spending package and looser monetary policy. Maarten Henskens, chief operating officer at Startale Group, said the government is recognizing blockchain as a pillar of its digital transformation strategy.
Why This Matters
Takaichi's election comes at a time when Japan has already established itself as a leader in crypto regulation. We previously covered how Japan ranked seventh globally with a score of 75.8 in the Global Bitcoin Policy Index, scoring particularly high in regulatory framework clarity at 85 out of 100. This existing foundation provides Takaichi a strong platform to build upon.
Japan saw 120% year-on-year growth in onchain value received in the 12 months to June 2025, according to Chainalysis' Geography of Cryptocurrency Report. This growth rate was the strongest among five leading markets in the Asia-Pacific region. A looser monetary outlook under new leadership could sustain liquidity and fuel investor appetite for alternative assets.
The election immediately affected financial markets beyond traditional equities. Bitcoin reached new highs against the Japanese yen, surpassing 125,700 yen over the election weekend. Crypto-related stocks including Metaplanet and Remixpoint saw gains as investors responded positively to potential policy shifts. Japan's weaker yen combined with pro-growth economic policies creates conditions favorable for digital asset adoption.
Industry Implications
Takaichi's administration could bring greater clarity to token classifications under Japan's Financial Services Agency. The FSA currently distinguishes between payment tokens, securities and utility tokens, each with different regulatory requirements. Her leadership will likely focus on refinement and expansion of existing categories, particularly related to custody, tokenized financial instruments and investor protection standards.
According to BeInCrypto, Japan's Financial Services Agency formally requested a review of cryptocurrency taxation for fiscal year 2026 on August 29, 2025. Proposed measures include introducing separate taxation at approximately 20% for crypto gains, compared to the current progressive rate reaching 55%. The reforms would also allow loss carryforwards for up to three years.
Takaichi's cooperation with opposition parties could accelerate these reforms. The Democratic Party for the People and Japan Innovation Party have historically supported crypto tax reforms. If Takaichi strengthens ties with these groups, the likelihood of implementing cryptocurrency tax reforms as part of broader tax reduction policy could increase substantially.
Japan has been developing its crypto regulatory framework since 2016 when the FSA amended the Payment Services Act following the Mt. Gox collapse. The country introduced regulations allowing licensed financial institutions to issue fiat-backed stablecoins in 2022. More recent developments include the FSA proposing to reclassify crypto assets as traditional financial products starting in 2026, which would subject cryptocurrencies to a new tax regime.
Japan's evolving regulations position the country as an attractive destination for cryptocurrency firms seeking regulatory clarity. The combination of established frameworks, potential tax reforms, and pro-growth leadership creates conditions for Japan to emerge as a major global hub for crypto companies. However, success depends on Takaichi's ability to balance innovation promotion with investor protection while coordinating with opposition parties on tax policy implementation.
