Japan’s ruling party proposes developing financial infrastructure using AI and blockchain

The ruling Liberal Democratic Party (LDP) of Japan has approved a proposal to promote the development of automated financial infrastructure using AI and blockchain.

In a Tuesday publication, the LDP’s Policy Research Council announced the “Next Generation AI and Onchain Finance Initiative.” Policymakers proposed using blockchain technology to settle payments in the retail and wholesale sectors, for AI to “autonomously execute economic activities,” and clarifying the legality of yen-pegged stablecoins.

“In Japan, the expanded adoption of blockchain technology will play a crucial role in establishing the necessary infrastructure to ensure that the nation remains ‘chosen by AI’,” said the council, according to a translated statement, adding:

“If we can take the lead among nations in establishing a secure and trusted payment infrastructure for on-chain transactions, we can anticipate deepening cooperation in various forms — such as by providing expertise and services — particularly with Asian countries that share strong economic ties with Japan.”

LDP’s AI and blockchain proposal. Source: Masaaki Taira

Under Japanese Prime Minister Sanae Takaichi, who assumed office in October 2025, the country’s ruling party has supported many initiatives related to digital assets and blockchain technology. In April, the government amended a law classifying crypto assets as financial instruments after reportedly weighing changes to guidelines that would allow digital asset-linked exchange-traded funds in January.

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“While this truly remains a ‘vision’ — one that we will now build piece by piece — I believe we have successfully succeeded in sketching out the ‘big picture’ as a first step,” said LDP member Seiji Kihara in a Monday X post on the AI and blockchain plan. “The critical task now lies in the follow-up work ahead, and we will continue to dedicate ourselves to this effort.”

Japanese crypto companies mull consolidation

On May 1, SBI Holdings said it was considering purchasing a stake in cryptocurrency exchange Bitbank. While the potential deal remains subject to negotiations and approvals, it would represent a significant consolidation of the Japanese crypto market, with a top 20 financial services company acquiring a digital asset platform.

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