Japan's Liberal Democratic Party Establishes On-Chain Finance Working Group, AI and Blockchain Fusion Leads Financial Innovation

Gate News: On March 24, Japan’s Liberal Democratic Party launched the “Next-Generation Artificial Intelligence and On-Chain Finance Vision Project Team,” aiming to build a national framework for on-chain finance based on artificial intelligence. This is the most ambitious tokenized finance legislation initiative in Tokyo to date. The working group was founded by former Digital Minister Akira Hirabayashi, with Seiji Kihara serving as chairman and Hideki Murai as secretary-general. The goal is to promote systemic innovation in the financial sector within a few years.

Hirabayashi pointed out that Japan already has infrastructure to support on-chain finance development, including the first Japanese yen stablecoin JPYC and a stablecoin project jointly developed by the three major banks. Additionally, Japan Post Bank is promoting the DCJPY tokenized deposit. Hirabayashi stated that these elements have not yet formed a complete system and require a unified blueprint to integrate various digital financial services. The project team will soon draft a white paper proposing regulatory reforms covering trust law, deposit insurance, and KYC frameworks, incorporating the Liberal Democratic Party’s growth strategy and the government’s annual fiscal policy guidelines.

Kihara was appointed as chairman to ensure the project team is proficient in both finance and technology, capable of effectively coordinating with regulatory agencies. Hirabayashi emphasized that this initiative will put pressure on the Financial Services Agency and the Ministry of Finance to encourage traditional banks and securities firms to accelerate blockchain infrastructure development while maintaining existing systems.

Analysts believe that this move by Japan’s Liberal Democratic Party indicates the government is pushing for policy implementation, reducing hesitation among financial institutions between traditional systems and blockchain investments. With AI and on-chain finance deeply integrated, Japan could gain a first-mover advantage in the global digital asset and tokenized finance fields, providing clear policy support for stablecoins, tokenized deposits, and on-chain payment systems.

The establishment of this project team marks Japan’s official inclusion of on-chain finance into its national strategy, offering policy backing for banks, securities firms, and digital asset platforms. It is expected to accelerate domestic financial institutions’ digital transformation and enhance Japan’s competitiveness in international blockchain financial innovation.