Japan has entered a historic new chapter. On 21 October, Sanae Takaichi was elected as the nation’s first-ever female prime minister, marking a milestone in the country’s 140-year parliamentary history. The conservative politician, a long-time ally of the late Shinzo Abe, secured her position as Japan’s 104th leader after the ruling Liberal Democratic Party (LDP) formed a coalition with the Japan Innovation Party. Takaichi triumphed over opposition leader Yoshihiko Noda in the lower house by a vote of 237 to 149, signalling both political stability and the potential for reform.

While her election represents a historic leap for gender representation, it also raises questions about Japan’s economic and technological future, particularly in the fast-evolving world of cryptocurrency and blockchain innovation.

A Cautiously Pro-Crypto Leader

Sanae Takaichi’s direct comments on cryptocurrencies have been limited in recent years, but her policy record paints a clear picture. Known for her advocacy of technological sovereignty and strategic investment in digital infrastructure, Takaichi has long supported Japan’s development in fields such as blockchain, cybersecurity and Web3.

Industry observers suggest that her administration is likely to strengthen the regulatory framework surrounding crypto assets, not by tightening restrictions, but by providing greater clarity and investor protection under the Financial Instruments and Exchange Act (FIEA).

The move aligns with recent pro-technology measures from Japan’s Financial Services Agency (FSA), which include:

• Allowing banks to hold Bitcoin and other digital assets under custody.
• Implementing a ban on insider trading in crypto markets.
• Simplifying token listing procedures for domestic exchanges.

Takaichi views cryptocurrencies as speculative yet innovative, supporting a balanced approach, regulated growth over unchecked expansion. This measured stance has led many analysts to describe her as both “pro-technology” and “pro-crypto.”

Japan’s Progressive Crypto Landscape

Japan already stands out as one of the most crypto-progressive nations in Asia. Over the past five years, the country’s crypto user base has quadrupled, reaching an estimated 8 million users, while on-chain transaction value has surged 120% year-on-year, the fastest growth rate in the Asia-Pacific region.

The government has also expanded access to crypto investment products, including exchange-traded funds (ETFs) and tokenized securities. This progressive stance has positioned Japan as a regional leader in regulated digital finance, with strong safeguards to protect investors without stifling innovation.

Under Takaichi’s leadership, this momentum is expected to continue. Her government’s focus on economic revitalisation, digital innovation and tax reform could provide fresh impetus to Japan’s crypto ecosystem, encouraging both domestic and international investment.

Tax Reform Could Unlock Greater Adoption

One of the most closely watched policy areas under Takaichi’s new government is crypto taxation. Currently, Japan taxes crypto gains as miscellaneous income, with rates reaching up to 55%, among the highest in the developed world. This has long been seen as a major obstacle to wider adoption.

Takaichi’s tax-cutting orientation could change that. Her coalition partners, particularly the Japan Innovation Party, have advocated for aligning crypto tax rates with equities at 20%. Analysts believe this long-discussed reform may finally gain traction under her leadership.

Such a shift could dramatically boost retail participation, attract institutional investors and reinforce Japan’s role as a friendly hub for crypto innovation.

At the same time, her administration’s monetary easing and fiscal stimulus policies, a continuation of “Abenomics,” could inject additional liquidity into alternative assets such as Bitcoin and Ethereum, further supporting Web3 and DeFi sectors.

The Road Ahead for Japan’s Crypto Future

With Sanae Takaichi at the helm, Japan’s crypto industry stands at a pivotal crossroads. Her government’s expected focus on digital infrastructure, financial innovation and balanced regulation could push Japan into a new era of responsible crypto growth.

If her policies succeed, Japan could emerge not just as a regional crypto hub, but as a global model for integrating blockchain and digital assets into a modern economy, combining innovation with strong investor protection.

While it remains early days for her administration, one thing is clear: under Prime Minister Takaichi, Japan’s crypto future looks more promising and more regulated, than ever before.