Japan LDP Panel Urges Yen Stablecoins for Asian Payments, Calls for Crypto ETF Rules

A policy panel within Japan’s ruling Liberal Democratic Party has urged the government to expand the use of yen-backed stablecoins and establish rules for cryptocurrency exchange-traded funds. The push appears aimed at strengthening yen-based digital payment infrastructure as dollar-backed stablecoins spread.

Reuters reported on June 1 that the LDP’s blockchain promotion panel said in a proposal submitted that Japan should promote the use of yen stablecoins for payments across Asia. It also called for a legal framework to allow trading in crypto ETFs.

The proposal said crypto ETFs could offer investors an investment product that is easy to understand. It argued that the government should position them as formal investment instruments in financial markets.

The panel submitted the proposal to Finance Minister Satsuki Katayama, who also oversees Japan’s Financial Services Agency.

Junichi Kanda, a lawmaker on the panel, told reporters after meeting Katayama that the group had asked the government to take steps to promote yen stablecoins in Asian payments going forward. He added that Japan could use the Asian Development Bank’s annual meeting, which it will host in May 2027, to highlight policies related to yen stablecoins and blockchain innovation.

Japan’s Financial Services Agency has been supporting domestic financial institutions as they use blockchain technology to improve operations and efficiency. Japan’s three largest banks have also announced an experiment to jointly issue stablecoins with the agency’s support. Japanese startup JPYC began issuing a yen-linked stablecoin in October 2025.

Reuters said dollar-pegged stablecoins have grown with strong backing from President Donald Trump. Policymakers, however, have warned that stablecoins could move funds outside the regulated banking system and weaken the role of commercial banks in global payment flows.

Bank of Japan Deputy Governor Ryozo Himino said last month that a “holistic approach” is needed when designing the future global monetary system, rather than restricting the choice to either central bank digital currencies or stablecoins.