Japanese PM Fumio Kishida Champions Web3 and Blockchain For Social Transformation

Key Takeaways

• Japanese Prime Minister Fumio Kishida has said blockchain technology can be “the foundation for solving social issues.”
• The Japanese government has ramped up its efforts to boost the Web3 sector in recent times.
• A government white paper recommended creating a legal framework for DAOs to maximize their potential for businesses, non-profits, and community groups.

The promise of individual empowerment and a more democratic model of capitalism lies at the heart of the Web3 philosophy.

However, these lofty ideals have often encountered fierce resistance from the state, which attempts to neutralize anything it cannot control.

Yet despite the inevitable friction between decentralized platforms and centralized powers, most governments now accept that blockchains can have a valuable civic function. 

For instance, Japanese Prime Minister Fumio Kishida, who intends to step down in September, used an opening address  at the WebX blockchain conference on Wednesday, Aug. 28, to declare that  blockchain technology can be “the foundation for solving social issues.”

Kishida’s ‘New Japanese Capitalism’

Since becoming Prime Minister in 2021, Kishida has described his government’s economic vision as “a new form of capitalism” that seeks to balance private sector growth with robust investment in public services. 

With a strong emphasis on digital transformation and reenergizing Japan’s sleepy financial markets, Kishidanomics has much to gain from embracing Web3. However, the country has traditionally taken a cautious approach to decentralized finance.

Japan’s Crypto Regulation

Japan was among the first in the world to pursue a comprehensive licensing regime for crypto firms in 2017.

This incurred additional compliance costs for Japanese businesses compared to their peers elsewhere.

But it also helped the country avoid any major fallout from a string of corporate failures that rocked the global crypto sector in 2022.

When FTX collapsed in November of that year, its Japanese arm was the only company in the group that successfully navigated the crisis without any losses for users. 

The conservative stance taken by Japan’s Financial Services Agency (FSA) means some of the sector’s biggest growth drivers have yet to arrive in the country.

Earlier this month, FSA Chairman Hideki Kanda expressed skepticism about the value of crypto ETFs and said “cautious consideration” was needed before they could be approved.

Nevertheless, Prime Minister Kishda’s latest comments suggest the government is serious about incubating Japan’s wider Web3 economy.

Promoting Web3 Growth

In his speech, he said the government has “implemented concrete measures” to facilitate fundraising for Web3 startups.

These include the move to end taxation of unrealized cryptocurrency gains and efforts to allow more investment companies to acquire and hold crypto assets.

Looking forward, Kishida said an upcoming economic reform bill will help promote the use of blockchain technology in payments and media. 

Meanwhile, in April the government published a Web3 whitepaper that outlined prospective policy changes that could help realize the social and economic benefits of decentralization. 

One proposal put forward by the paper was the creation of a legal framework recognizing the status of decentralized autonomous organizations (DAOs). 

Citing the success of the Swiss model, the paper argued that enabling DAOs to incorporate limited liability companies would have a range of benefits across society:

“Examples of the use of DAOs in Japan include local development, resolution of social issues, and community management, and it is expected that DAOs will be used for a wider range of purposes and scope. [The technology has] great potential  from the perspective of revitalizing the Japanese economy and local communities.”

Echoing that sentiment, in his recent speech, Kishida said he hoped “innovations that lead to the resolution of social issues will be born one after another.”

About the Author

James Morales

Although his background is in crypto and FinTech news, these days, James likes to roam across CCN’s editorial breadth, focusing mostly on digital technology. Having always been fascinated by the latest innovations, he uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.

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