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Japan's LDP proposes AI and blockchain finance plan to expand stablecoins and tokenized deposits

Japan's ruling LDP released a policy plan to build a financial system on blockchain and AI, with stablecoins and tokenized deposits at its core. The party warned that delays could weaken Japan's monetary sovereignty.

2 min read
Finance

Japan's LDP Proposes AI-Blockchain Finance Plan Centered on Stablecoins and Tokenized Deposits

Japan's ruling Liberal Democratic Party released policy recommendations for building a financial system that combines artificial intelligence and blockchain technology, with stablecoins and tokenized deposits as core components.

The "Next-Generation AI and On-Chain Finance Vision" project team, operating under the LDP's Policy Research Council, outlined plans to automate payments, lending, and asset management while enabling round-the-clock financial services. The party identified finance as a potential "18th growth investment sector" for Japan.

The proposal directly addresses what the LDP calls the era of "agentic commerce"-a system where AI agents conduct economic activity autonomously. On-chain financial infrastructure, the party argues, is essential preparation for this shift.

Two Pillars: Tokenized Deposits and Stablecoins

Tokenized deposits (TDs) and stablecoins (SCs) form the foundation of the plan. The LDP set a deadline of year-end 2024 to organize and disclose key issues surrounding the tokenization of Bank of Japan current account deposits and a wholesale central bank digital currency.

For stablecoins, the proposal calls for ministries to jointly establish their legal status, enabling use for salary and tax payments. The party is also reviewing a joint stablecoin issuance plan involving Japan's three megabanks, with operations targeted to launch by March 2025.

Current stablecoin issuance in Japan totals approximately 45 trillion yen ($312 billion), dominated by dollar-based options like Tether's USDT and Circle's USDC.

Real-World Asset Tokenization and Regional Expansion

The LDP proposed tokenizing real-world assets-including accounts receivable and real estate-to develop Japan's asset-management industry through on-chain infrastructure.

The party also outlined regional and global coordination strategies. It called for an "AI and On-Chain Finance Asia Policy Dialogue Framework" and a "Global Stablecoin Corridor Initiative" to expand cross-border payments using yen-based stablecoins.

Sovereignty and Security Concerns Drive Timeline

The LDP warned that delays in adopting on-chain finance could deepen Japan's reliance on overseas payment systems and weaken monetary sovereignty. The party said the Financial Services Agency should lead a five-year roadmap with joint public-private investment.

The proposal also flagged quantum computing as a threat to blockchain cryptography. It urged Japan's Digital Agency to establish permanent monitoring and develop response measures.

The recommendations reflect a shift in how governments approach AI for Finance infrastructure, moving from theoretical frameworks to concrete implementation timelines and regulatory structures.

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