Japan's LDP Approves AI-Blockchain Financial System Proposal

Japan's ruling Liberal Democratic Party (LDP) has officially approved a new policy concept proposal to build the future 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, submitted to the party earlier this month, and obtained formal approval from the party's Policy Research Council on Tuesday. The LDP will now work with relevant parties to turn this proposal into government policy.

## Proposal Overview and Key Components

The proposal prioritizes the development of an automated financial infrastructure that supports 24/7 agentic commerce via blockchain networks. According to the proposal, in the age of agentic commerce, AI will autonomously handpick products and services instead of humans, which makes blockchain's tamper-resistant, verifiable, and programmable characteristics highly compatible with this new model.

## Tokenized Deposits and Stablecoins

The proposal laid out support for tokenized deposits and Japanese yen-denominated stablecoins. Regarding tokenized deposits, the proposal stated it is essential to tokenize the Bank of Japan's current account deposits. On stablecoins, the proposal highlighted the importance of legal clarity and mitigating systemic risks. The proposal also stated its support for the joint stablecoin issuance project under three Japanese megabanks.

## International Cooperation and Regulatory Framework

The proposal called for a framework to strengthen cooperation with other Asian countries on AI and blockchain initiatives. Additionally, it requested the Financial Services Agency (FSA) to formulate a five-year roadmap to promote investments in the project involving both the public and private sectors.

## Next Steps

With the official approval, the LDP will work with relevant parties to turn this proposal into government policy. Seiji Kihara commented on the approval, stating: "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."