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Japan is taking another step forward in embracing digital assets. At the Web3 WebX 2025 conference in Tokyo, Finance Minister Katsunobu Kato highlighted the potential role of cryptocurrencies in diversified investment portfolios, signaling the government’s openness to fostering a stronger digital asset ecosystem.
Crypto as Part of Diversified Investments
Minister Kato acknowledged that while cryptocurrencies come with risks due to their volatility, they also have the potential to contribute positively to diversified portfolios — provided a proper investment environment is in place.
He also noted that the Japanese government does not intend to over-regulate the industry. Instead, the goal is to strike a balanced regulatory framework that encourages growth while addressing risks.
Tax Reforms on the Horizon
The ruling Liberal Democratic Party (LDP) has proposed measures to make crypto investment more attractive. Currently, realized profits on digital assets in Japan are taxed at a steep 55% rate. Under the proposed reforms, this could be reduced to 20%, making the sector far more appealing for investors.
Institutional Interest is Growing
Institutional players in Japan are also stepping up. The SBI Group, a major financial conglomerate, recently announced a partnership with Chainlink. This collaboration aims to accelerate the adoption of blockchain and tokenization, particularly in Japan and the broader Asia-Pacific region.
A survey by SBI Digital Asset Holdings showed that:
- 76% of over 50 financial institutions plan to invest in tokenized securities, citing cost reductions and faster settlement times as key benefits.
- The main challenge remains the lack of robust institutional infrastructure to support these investments.
Expanding Partnerships and Stablecoin Developments
SBI has also struck new partnerships with Circle (issuer of USDC), Ripple Labs (behind XRP and RLUSD), and Web3 company Startale. Together, they plan to:
- Develop a trading platform for tokenized assets with 24/7 availability, faster settlements, and fractional ownership.
- Promote the use of stablecoins like USDC and RLUSD in Japan.
Additionally, Japan’s Financial Services Agency (FSA) is preparing to approve the country’s first yen-based stablecoin this autumn. The project is being led by Sumitomo Mitsui Financial Group (SMBC), Japan’s second-largest bank.
Conclusion
Japan’s evolving stance on digital assets shows a clear shift toward creating a friendlier environment for both retail and institutional investors. From proposed tax reforms to high-profile partnerships, the country is positioning itself as a hub for tokenization, stablecoins, and blockchain adoption in the Asia-Pacific region.
As Finance Minister Kato highlighted, the challenge lies in balancing risk management with innovation — but Japan’s latest moves suggest it is ready to take that step.
This article reflects the opinions of the publisher based on available information at the time of writing. It is not intended to provide financial advice, and it does not necessarily represent the views of the news site or its affiliates. Readers are encouraged to conduct further research or consult with a financial advisor before making any investment decisions.
