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

Japan’s
Prime
Minister
Fumio
Kishida
and
his
ruling
Liberal
Democratic
Party
(LDP)
have
shepherded
the
country’s
Web3
strategy
along
with
a
host
of
regulations
and
plans
for
the
crypto
sector.
A
major

corruption
scandal,
however,
bodes
ill
for
Kishida
and
the
party’s
future
–
leaving
the
country’s
crypto
progress
on
uncertain
footing.

The
LDP
has
maintained
power
for
nearly
70
years,
with
brief
interruptions
in
1993
and
2003.
The
party

faces
by-elections
this
month
and
is
set
to
have
its
party
leadership
election
this
September,
which
some
political
analysts
say
might
see
Kishida,

who
called
Web3
“a
new
form
of
capitalism,”
replaced
as
president
of
the
party
and
–
consequently
–
as
prime
minister
of
Japan.

In
2023,
Japan
became
one
of
the

major
jurisdictions
to
regulate
stablecoins,
which
are
crypto
assets
tied
to
the
value
of
other
currencies.
When
much
of
the
world
collectively
detached
itself
from
the
scandal-ridden
cryptoverse
amid
the
market
collapse
of
2022,
Kishida’s
government

saw
it
as
an
opportunity
and
a
pillar
for
economic
growth.

Kishida’s
cabinet
has
a
Web3
project
team,
which
last
year
released
a
white
paper
outlining
the
national
non-fungible
token
(NFT)
and
decentralized
autonomous
organization
(DAO)
strategy,
which

is
now
working
to
introduce
new
Web3
policies.
The
LDP
is
also
proposing

corporate
tax
cuts,
and
making
way
for

venture
capital
firms
to
hold
crypto.
It’s
unclear
how
these
efforts
may
be
affected
by
the
party’s
shaky
future.

The
LDP’s
Web3
white
paper
has
manifested
in
more
than
160
active
Web3
projects
across
the
country,
many
of
them
focused
on
revitalizing
Japan’s
vanishing
traditions
and
rural
villages.

Kishida
has

vowed
to
take
disciplinary
action
against
party
members
involved
in
the
scandal,
which
saw
three
lawmakers
and
a
handful
of
political
aides
arrested
on
accusations
of
taking
kickbacks,
before
the
lower
house
of
parliament
is
dissolved.