Japan’s Crypto Future Hangs in the Balance!

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Japan’s National Leadership Change: What It Means to Crypto

As a researcher delving into current events, I find myself reporting that on September 7th, Prime Minister Shigeru Ishiba of Japan tendered his resignation. He attributed this decision to the successful conclusion of US trade negotiations and mounting internal discord within our political party. This move sets off a leadership competition within our ruling party.

As a analyst, I find myself pondering about the implications of this recent change, which has cast a shadow of uncertainty over Japan’s future economic trajectory. Specifically, it raises questions regarding regulatory frameworks for cryptocurrencies and digital industry policies that were previously gaining traction under the previous administration.

Ishiba Steps Down After Mounting Pressure

According to reports, Shigeru Ishiba, the Prime Minister, announced on Saturday that he would step down, concluding his term ahead of schedule. This decision came after several weeks of internal demands for an early leadership vote, which some perceived as a lack of confidence in his leadership.

With Ishiba’s resignation, the party no longer requires his vote. Instead, they will conduct a new leadership election to choose his successor, whom Ishiba himself has confirmed he will not run for. This decision by Ishiba coincides with the end of trade negotiations with the US. Following this, President Donald Trump signed an executive order lowering automobile tariffs.

The decision is a reflection of broader unrest in politics. Following a significant loss by the ruling party in the upper house elections in July, opposition parties and many within the LDP demanded Ishiba’s resignation. On September 2nd, four high-ranking party officials, including Secretary-General Hiroshi Moriyama, resigned all at once, leaving the prime minister politically vulnerable.

本日、自由民主党総裁の職を辞することといたしました。

— 石破茂 (@shigeruishiba) September 7, 2025

Implications for Crypto and Digital Policy

Ishiba’s departure carries significant consequences for the cryptocurrency and Web3 community within Japan. In August, he spoke at a Web3 conference in Tokyo, stressing the importance of startups focusing on blockchain and artificial intelligence for Japan’s economic development and resolution of social issues. His statements indicated ongoing advocacy for investment and regulatory changes in the digital sector.

With a new leader set to take office soon, the future course of action remains unclear. Sanae Takaichi, previously the Minister of Economy, Trade and Industry, and Shinjiro Koizumi, who served as the Minister of Agriculture, Forestry and Fisheries, are among the top contenders for leadership.

Last month’s poll by Nikkei showed that Takaichi received the highest support (23%) among contenders as the next prime minister. In second place was Koizumi, son of former PM Junichiro Koizumi, with 22% support. The current Prime Minister, Ishiba, ranked third with 8% backing.

The way they approach digital assets varies in terms of tone, but neither has yet provided a detailed plan or strategy for it.

In March, Takaichi put forward a plan suggesting the establishment of a collaborative framework where financial entities, including cryptocurrency exchanges, could exchange information about potentially suspicious transactions. This setup would facilitate earlier account lockdowns. As a result, Takaichi’s actions can be seen as indicative of a preference for more stringent regulation.

In his TV show, Koizumi pointed out that there’s a significant lag in digitalizing politics. Politicians often encourage the public to adapt to digitalization, yet they tend to delay this transformation within their own circles. This delayed action, he noted, contributes to political distrust among citizens.

Koizumi hasn’t provided a comprehensive digitalization policy yet, but his comments imply a more welcoming approach towards this digital shift. Occasionally, he’s made statements that can be construed as favorable toward cryptocurrencies and stablecoins.

Supporters in the industry believe that Ishiba’s administration was open to discussions about tax reform regarding cryptocurrencies. A large part of this push came from Digital Minister Masaaki Taira, who is known for his support of lessening restrictions on digital asset transactions. Whether this progress will persist depends on who will lead the LDP next.

Market Reaction and Crypto-Linked Stocks

In response to Ishiba’s declaration, the financial markets moved swiftly. On Monday morning, the Japanese yen depreciated, trading at approximately 148.48 yen per US dollar, representing a drop of over 1% compared to the closing rate of the previous day.

Based on Tomoyuki Ueno’s comments, as the chief economist at NLI Research Institute, it is suggested that increased expectations of fiscal expansion might lead to further weakening of the Japanese Yen, potentially causing a decrease of approximately 2 yen, or $0.013, against the US dollar.

Cryptocurrency-linked stocks, particularly those belonging to DAT companies, have displayed initial signs of increased demand. Currently, Metaplanet has risen to ¥716 (an increase of 0.42%), Remixpoint has climbed to ¥317 (a rise of 1.37%), Ikuyo is trading at ¥1,152 (up by 0.17%), and Livwork has advanced to ¥793 (an increase of 1.93%). Market experts believe these movements are indicative of investors’ expectations for policy adjustments that may redefine Japan’s position in digital finance.

The result of the LDP leadership election could decide whether Japan adopts stricter regulation over cryptocurrencies or follows Ishiba’s more gradual approach that promotes innovation while keeping in step with global norms.

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2025-09-08 06:57