Japan’s Embrace of Web3 Uncertain as Ruling Party Under Threat

Prime Minister Fumio Kishida and his Liberal Democratic Party (LDP) have spearheaded Japan’s Web3 strategy with regulations and plans for the crypto sector. However, a major corruption scandal could impact Kishida’s leadership in September’s party elections, potentially affecting the future of Web3 policy and progress.

Prime Minister Fumio Kishida of Japan and his Liberal Democratic Party (LDP) have been instrumental in guiding Japan’s Web3 initiative, accompanied by numerous regulations and proposals for the cryptocurrency industry. However, a significant corruption scandal looms over Kishida and the LDP, casting doubt on their future and potentially halting Japan’s crypto advancements.

The Liberal Democratic Party (LDP) has held onto power for almost seven decades, experiencing only slight disruptions in 1993 and 2003. Upcoming by-elections this month and an anticipated party leadership contest in September could potentially lead to Kishida, who characterized Web3 as a new form of capitalism, stepping down as LDP president and, subsequently, relinquishing the prime ministership of Japan.

As a researcher in 2023, I discovered that Japan emerged as a leading regulatory authority in the realm of stablecoins, digital currencies pegged to the value of other currencies. Amidst the global exodus from the beleaguered cryptocurrency sphere following the market crash of 2022, the Kishida administration seized this opportunity and viewed it as a potential foundation for economic expansion.

Over 160 vibrant Web3 projects have emerged from the LDP’s white paper on Web3 technology, with a significant number dedicated to preserving Japan’s waning customs and revitalizing its rural areas.

Kishida has pledged to impose disciplinary measures against party members implicated in the bribery scandal, during which three legislators and several political aides were apprehended on allegations of soliciting bribes, prior to the lower house of parliament being disbanded.