A blockchain-focused parliamentary group within Japan’s ruling Liberal Democratic Party submitted a proposal to Finance Minister Satsuki Katayama on June 1, calling for progress on crypto tax reform, on-chain finance rules and wider use of blockchain-based financial infrastructure.
The proposal, reported by local news outlet NADA News on Monday, was submitted by the LDP’s Blockchain Promotion Parliamentary League and calls for regulatory changes as crypto assets, stablecoins and tokenized financial products become a larger part of financial policy discussions in Japan.
LDP lawmakers push crypto tax changes
The proposal calls for Japan to prepare for separate self-assessment taxation on crypto assets, based on the assumption that crypto regulation will shift under the Financial Instruments and Exchange Act.
The group also asked officials to review taxation on crypto-to-crypto exchanges and clarify rules around inheritance tax and donations involving digital assets, as Japan’s current crypto tax framework has long been criticized by parts of the industry, with investors and companies arguing that the treatment of gains can discourage trading and domestic Web3 activity.
The proposal asks the government to consider gradually raising the leverage limit for crypto derivatives trading offered to individuals from the current 2x level. It also calls for work on crypto exchange-traded fund rules and stronger action against unregistered operators.
On-chain finance becomes a policy focus
The group placed on-chain finance at the center of its proposal, referring to financial activity in which securities issuance, ownership, trading and revenue distribution can be completed on blockchain networks.
Junichi Kanda, an LDP lawmaker involved in the proposal, said on-chain finance has become a particularly important theme this year. He also pointed to the Asian Development Bank’s annual meeting, expected to be held in Tokyo next May, saying Japan should advance efforts to expand on-chain finance across Asia, including through yen-denominated stablecoins.
Katayama reportedly noted that discussions around stablecoins and on-chain finance have accelerated in the United States, saying Japan also needs to move forward without falling behind overseas developments.
Tokyo weighs rules for tokenized finance
The proposal also calls for work on Yen-denominated stablecoins, central bank digital currencies, crypto ETFs and blockchain use in trade and logistics, while also pointing to tokenized deposits as part of Japan’s next-generation financial infrastructure.
LDP groups move toward common on-chain agenda
The move comes as on-chain finance is being discussed across several parts of the ruling party.
LDP lawmaker Seiji Kihara, who chairs the blockchain parliamentary league, also leads the party’s Next-Generation AI and On-Chain Finance Project Team, which released a separate proposal in May calling for on-chain finance to be treated as a national strategy.
That proposal also urged Japan to develop stablecoins and tokenized deposits as next-generation financial infrastructure, with related measures being considered for possible inclusion in the government’s upcoming 2026 basic economic and fiscal policy plan.