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Japan’s ruling Liberal Democratic Party (LDP) has urged the government to promote yen-based stablecoins for settlements across Asia and create a legal framework for cryptocurrency exchange-traded funds (ETFs).
The proposal, submitted to Finance Minister Satsuki Katayama on Monday, seeks to expand Japan’s role in digital finance while supporting blockchain innovation. The recommendations also position crypto ETFs as an official investment product within the country’s financial markets.
The LDP’s blockchain technology promotion panel presented the proposal to Katayama, who also oversees Japan’s Financial Services Agency (FSA). The panel stated that crypto ETFs could offer investors a simple and familiar way to gain exposure to digital assets without directly holding cryptocurrencies.
Meanwhile, lawmaker Junichi Kanda said Japan should use the Asian Development Bank’s annual meeting next May to showcase progress in blockchain technology and yen-based stablecoins. He told reporters that the government should take steps to encourage the future use of yen stablecoins for settlements across Asia.
A crypto ETF allows investors to access cryptocurrency markets through a regulated financial product. As a result, investors can gain exposure to digital assets without managing wallets or holding the underlying tokens.
The proposal arrives as the FSA continues to support blockchain-based innovation among domestic financial institutions. Regulators have encouraged projects that improve efficiency and modernize financial operations.
In addition, Japan’s three largest banks have announced a joint stablecoin experiment backed by the FSA. The initiative aims to explore practical uses for digital currencies within the financial system.
At the same time, startup JPYC began issuing yen-pegged stablecoins in October. The launch marked a notable development in a market where many consumers still favor traditional payment methods.
Globally, dollar-backed stablecoins have expanded rapidly with support from U.S. President Donald Trump. However, policymakers have warned that stablecoins could move funds outside regulated banking channels and reduce the role of commercial banks in international payment networks.
Furthermore, Bank of Japan Deputy Governor Ryozo Himino recently called for a broader approach to the future monetary system. He said policymakers should consider multiple options rather than limiting discussions to central bank digital currencies and stablecoins alone.
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The discussion around stablecoins extends beyond token issuance. Industry participants increasingly focus on payment infrastructure, wallet access, compliance systems, and settlement networks.
Against that backdrop, SoftBank has strengthened its position in the digital payments sector. In October 2025, PayPay, SoftBank’s payments subsidiary, acquired a 40% stake in Binance Japan. Reports stated that the partnership aims to combine cryptocurrency access with everyday cashless payments.
The arrangement allows Binance Japan users to purchase cryptocurrencies through PayPay Money and withdraw proceeds through the same platform. PayPay serves more than 70 million users, giving the company a large presence in Japan’s digital payments market.
SoftBank already holds positions across several parts of that ecosystem through PayPay and Binance Japan. As policymakers discuss new rules, existing payment networks and distribution channels could play a central role in bringing digital financial products to consumers.
Japan’s ruling party is pushing yen stablecoins for regional settlements and a legal framework for crypto ETFs, signaling a broader shift toward blockchain-led finance. With the FSA, major banks, and PayPay-linked rails already active, the next step is clear: turn policy proposals into usable market infrastructure.
