Japan Gets New Prime Minister As Crypto Community Remains Concerned

As of September 27th, 2024, Shigeru Ishiba, a member of the Liberal Democratic Party, has been elected as the next Japanese Prime Minister. However, his previous role as defense minister and his preference for higher taxes and increased money supply may pose challenges for cryptocurrency supporters in the nation.

Infact, his stance on Bitcoin remains vague, and unlike his predecessor, Ishiba has not publicly engaged with crypto at major tech events, focusing instead on economic and defense issues. His past statements include harsh penalties for military draft evaders and strong advocacy for an Asian counterpart to NATO, along with a desire to amend the Japanese pacifist constitution due to perceived threats by North Korea.

Boosting The Military

Described as a Christian, military advocate, and banker, Ishiba is not what one might typically associate with a leader in a predominantly Shinto and Buddhist country that prides itself on pacifism. He will officially take over on October 1, following the recent vote, and his objectives are clear, namely to increase taxes on investments and income while boosting military capabilities.

The Japanese cryptocurrency landscape presents a mixed picture. While the foundational idea of Peer-to-Peer (P2P) electronic cash continues to thrive in various trading communities and local businesses, the government has faced significant criticism. This includes high taxes on crypto assets and a ban on privacy coins on exchanges. Nonetheless, trading on centralized platforms reportedly surged in 2024.

Amidst a changing economic environment, the Bank of Japan (BoJ) previously adjusted its longstanding monetary policy, indicating a possible departure compared to the prolonged era of an extremely accommodative monetary approach.

Growing Centralization

Ishiba has expressed intentions to enhance income and investment taxes but has assured that those investing through approved programs like NISA (Nippon Individual Savings Account) will be exempt. This program currently does not include cryptocurrencies, with the only exception being a select few ETF investments.

Despite his emphasis on tax reforms, Ishiba aligns with U.S. style economic policies, advocating for increased defense spending, higher minimum wages, and measures to combat deflation, which translates into aggressive monetary policies. While traditional fiat currency issues once led many to see crypto as a safe haven, the growing centralization of markets raises concerns among mainstream holders.

While militaristic policies might not seem directly connected to cryptocurrency, closer ties with U.S. military efforts and increased focus on global conflicts could have substantial implications for the crypto market in Japan.