Japan's LDP Approves AI-Blockchain Financial System Proposal

Japan's ruling Liberal Democratic Party (LDP) approved a policy proposal on Tuesday to build a national financial system using artificial intelligence and blockchain technology. The proposal, titled "Next-generation AI & Onchain Finance Concept," was drafted by a project team within the LDP led by party member Seiji Kihara and submitted earlier that month. The LDP aims to develop an automated financial infrastructure that supports 24/7 agentic commerce via blockchain networks, leveraging blockchain's tamper-resistant, verifiable, and programmable characteristics for autonomous commerce operations.

## Proposal Priorities

The proposal prioritizes three key financial innovations. First, it calls for tokenization of Bank of Japan current account deposits to support the emerging agentic commerce environment. Second, it expresses support for Japanese yen-denominated stablecoins, emphasizing the importance of legal clarity and systemic risk mitigation. Third, it backs the joint stablecoin issuance project being developed by three Japanese megabanks.

## Regional and Regulatory Framework

The proposal includes a request for the Financial Services Agency (FSA) to formulate a five-year roadmap to promote investments in the project involving both public and private sectors. It also calls for a framework to strengthen cooperation with other Asian countries on AI and blockchain initiatives.

## Next Steps

With the official approval from the Policy Research Council, the LDP will work with relevant parties to turn this proposal into government policy. Seiji Kihara stated on X: "It is truly a 'concept,' and from here on, we will build it up piece by piece. The important thing is the follow-up from now on, and we will continue to work on it."