Japan LDP pushes for crypto ETFs, yen stablecoins

Japan’s Liberal Democratic Party Parliamentary Association for the Promotion of Blockchain delivered a set of recommendations to Finance Minister Satsuki Katayama on Monday calling for approval of crypto exchange-traded funds, higher retail leverage for crypto derivatives and support for yen-denominated stablecoins.

The group proposed establishing a regulatory framework for ETFs tied to digital assets, doubling the allowable leverage for retail cryptocurrency derivatives trading and creating clearer rules for on-chain financial services. The package also covered central bank digital currencies and other blockchain applications.

Katayama responded at a briefing that Japan must not fall behind global developments and referenced policy steps taken in the United States. LDP member Junichi Kanda told a press conference that Japan should move to expand on-chain finance across Asia and include the development and adoption of yen-denominated stablecoins in those efforts.

The recommendations come about two months after the government approved changes allowing crypto assets to be classified as financial instruments rather than only as a means of payment. The Financial Services Agency has indicated plans to amend rules to permit crypto ETFs, and the LDP document aligns with that planned direction.

The stablecoin market is valued at roughly $320 billion and is dominated by tokens pegged to the U.S. dollar. A report from the Bank for International Settlements found yen-denominated stablecoins make up less than 0.01% of the market capitalization of U.S. dollar–pegged coins. U.S. lawmakers recently enacted a payment stablecoin framework known as the GENIUS Act, a development cited by the LDP group as part of international momentum.

Private firms have signaled interest in Japan. Prediction market operator Polymarket has indicated a plan to seek approval to operate in Japan by 2030, though Japan’s strict laws on online and in-person gambling could present legal challenges.

The LDP group described its proposals as measures to support on-chain finance growth in Asia, to clarify product definitions and market rules, and to foster domestic stablecoins denominated in yen.