Japan’s Web3 Strategy: A Safe Haven for Chinese Investors Fleeing Capital Controls?

On June 7, 2025, Japan enacted a series of regulations aimed at enabling stronger consumer protections around cryptocurrency investments, mandating that cryptocurrency exchanges store customer assets in Japan, and enabling stronger anti-money laundering (AML) laws. These regulations also allow individuals to use cryptocurrencies directly in apps, marking a significant step in mainstream digital asset adoption.

Simultaneously, the Bank of Japan announced that it had no immediate plans to launch its digital yen, with Executive Director Kazunari Kamiyama attributing this to Japan’s continued high cash usage. Interestingly enough, these comments came amidst the central bank releasing a progress report on its central bank digital currency (CBDC) pilot, demonstrating ongoing government collaboration with over 60 organizations on blockchain integration and APIs.

Japan’s approach to Web3 and cryptocurrencies has been marked by strict regulatory oversight, asset localization, and a cautious CBDC rollout. This reflects a broader strategy to balance innovation with ...