Japan’s ruling Liberal Democratic Party (LDP) has formally adopted a policy blueprint that aims to build a next-generation financial infrastructure integrating artificial intelligence and blockchain technology. The proposal, titled "Next-generation AI & Onchain Finance Concept," was prepared by a project team under party member Seiji Kihara and officially approved on May 19.
The plan envisions a fully automated, 24/7 financial ecosystem covering payments, lending, and asset management. It designates finance as Japan’s 18th official growth investment sector, signaling a strategic pivot toward public-private collaboration. Central to the proposal are two transformative ideas: tokenized Bank of Japan current account deposits and the joint issuance of a yen-backed stablecoin by the country’s three megabanks—Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group, and Mizuho Financial Group.
The document calls for deposit-taking institutions to develop tokenized deposit products within the year and urges clarification on whether stablecoins can be used for wages, taxes, and corporate contributions. It also asks the Bank of Japan to publish a review path for implementing tokenized deposits, potentially including wholesale CBDC use. The LDP’s vision extends regionally, proposing an "AI and Onchain Finance Asia Policy Dialogue Framework" to align standards for real-world assets, KYC, AML, and cross-border rules, leveraging the fact that 40–50% of Japan’s trade settlement with Asia is already yen-denominated.
Kihara emphasized a step-by-step approach, stating, "It is truly a 'concept,' and from here on, we will build it up piece by piece." While legislative and regulatory hurdles remain, the proposal marks a significant step toward institutionalizing digital finance in one of the world’s largest economies, potentially influencing other nations to follow suit.
