JAPAN’S RULING LDP PARTY SUBMITS PROPOSAL TO FINANCE MINISTER BACKING CRYPTO ETF FRAMEWORK AND YEN STABLECOINS ACROSS ASIA Japan’s Liberal Democratic Party blockchain technology promotion panel submitted a proposal to Finance Minister Satsuki Katayama on Monday calling for a legal framework that would allow cryptocurrency exchange-traded funds to trade in Japan and for the government to promote yen-backed stablecoins for cross-border settlement across Asia. The proposal states that crypto ETFs “would provide investors with easy-to-understand ways of investment” and calls on the government to position them as official investment instruments in Japan’s financial market. LDP lawmaker Junichi Kanda told reporters after meeting Katayama that the panel urged the government “to take steps to promote yen stablecoins for settlement in Asia in the future.” The proposal also supports tokenized bank deposits and AI-driven financial infrastructure linked to blockchain settlement systems. The LDP submission coincided with the Japan Financial Services Agency’s new foreign stablecoin framework taking effect on June 1, creating a legal pathway for overseas stablecoin issuers to operate in Japan as electronic payment instruments under the Payment Services Act. The FSA requires foreign issuers to meet licensing, collateral management, audit, and regulatory cooperation standards to qualify. Japan’s three largest banks are separately experimenting with jointly issuing stablecoins under an FSA-backed pilot. Domestic startup JPYC launched a yen-pegged stablecoin in October 2025. Kanda said Japan could use the Asian Development Bank’s annual meeting, which Japan will host in May 2027, to highlight its yen stablecoin and blockchain policies internationally. Japan would join the United States and Hong Kong in offering a regulated crypto ETF market if the LDP proposal advances to legislation. Finance Minister Katayama declared 2026 “Japan’s digital year” in a January address and has previously backed crypto ETF access. The broader context is dollar-stablecoin dominance: the $315 billion stablecoin market is overwhelmingly backed by U.S. dollar reserves, and Japanese policymakers have described the development of yen-pegged alternatives as a strategic priority for preserving the yen’s relevance in Asian digital payment flows. The Bank of Japan’s deputy governor said last month that global monetary system design requires a “holistic approach” to avoid dollar-only digital settlement infrastructure.