Japan’s ruling Liberal Democratic Party has introduced a comprehensive proposal aimed at building a next-generation financial ecosystem powered by artificial intelligence and blockchain technology. The initiative outlines plans to expand the use of stablecoins and tokenized deposits while modernizing the country’s financial infrastructure for a rapidly evolving digital economy.
The proposal was reportedly released by the Next-Generation AI and On-Chain Finance Vision project team, which operates under the party’s Digital Society Promotion Headquarters within its Policy Research Council. The recommendations focus on establishing an advanced AI- and blockchain-enabled financial system capable of supporting automated payments, lending operations, and asset management services around the clock.
According to the proposal, Japan’s financial sector should be positioned as the country’s eighteenth growth investment sector, highlighting the government’s intention to strengthen its role in the broader digital transformation of the economy.
Stablecoins and Tokenized Deposits Become Core Focus
The report identified tokenized deposits and stablecoins as the two primary pillars of the future financial strategy. Policymakers reportedly urged authorities to organize and disclose major issues surrounding the tokenization of current account deposits held at the Bank of Japan, along with considerations related to a wholesale central bank digital currency, before the end of the year.
The proposal also emphasized the importance of clarifying the legal status of stablecoins for practical applications such as salary distribution and tax payments. Ministries and regulatory agencies were encouraged to collaborate in establishing a unified legal framework that would support wider adoption.
Japan’s ruling party proposed expanding stablecoins and tokenized deposits as part of a broader AI- and blockchain-driven financial infrastructure designed to support automated and always-active financial services.
The document further referenced a joint stablecoin issuance initiative involving Japan’s three major banking groups. Officials reportedly stated that discussions are underway with the objective of launching real-world operations by March next year.
Preparing for the Era of Agentic Commerce
The proposal stressed that Japan urgently needs on-chain financial infrastructure to prepare for the rise of agentic commerce, a system in which AI agents independently carry out economic transactions and financial activities without direct human intervention.
Lawmakers reportedly argued that future commerce models would increasingly depend on blockchain-powered settlement systems capable of operating continuously and efficiently. The combination of artificial intelligence and decentralized financial infrastructure was presented as essential for supporting this transition.
The initiative highlighted the growing importance of on-chain financial systems in enabling AI agents to autonomously manage transactions, payments, and economic activities in the future digital economy.
In addition to stablecoins, the proposal included plans to strengthen Japan’s asset-management industry through the tokenization of real-world assets such as real estate and accounts receivable. Officials believe this approach could improve liquidity, efficiency, and investment accessibility within the domestic financial sector.
Regional Cooperation and Security Challenges
The strategy also called for stronger collaboration with neighboring Asian countries. Policymakers proposed establishing an AI and On-Chain Finance Asia Policy Dialogue Framework alongside a Global Stablecoin Corridor Initiative aimed at expanding cross-border transactions using yen-backed stablecoins.
Reports indicated that stablecoin issuance in Japan has already grown substantially, reaching approximately 45 trillion yen, or roughly $312 billion. Dollar-backed stablecoins such as Tether and USD Coin were identified as major contributors to that growth.
The Liberal Democratic Party reportedly warned that delayed action could increase dependence on foreign payment infrastructure and potentially weaken Japan’s monetary sovereignty. As a result, the proposal recommended the development of a five-year national roadmap led by the Financial Services Agency, supported by coordinated investments from both public and private sectors.
The proposal additionally warned that future advances in quantum computing could threaten blockchain cryptography, prompting calls for permanent monitoring systems and dedicated countermeasure planning by Japan’s Digital Agency.
