How Will Japan’s New Prime Minister Impact the Web3 Industry?

1. Introduction

Japan's Web3 market is defined by government-led efforts to revitalize the industry. Introduced by the Kishida Cabinet in 2022, this policy highlights the government's strong commitment to positioning Web3 technology as a key growth driver. Key actions include establishing a Web3.0 office within the METI(Ministry of Economy, Trade, and Industry), revising stablecoin-related regulations, and promoting various support initiatives.

The Japanese government's proactive Web3 policy is producing tangible results. Notably, the number of Web3 technology development library downloads surged in the second half of 2022, revitalizing the broader industry. This demonstrates that government-led initiatives are driving tangible growth in the sector.

However, after Prime Minister Kishida announced he would not seek re-election, Japan’s Web3 industry faces a significant turning point. This report examines the effects of these political changes on Japan’s Web3 landscape and outlines future expectations.

2. Changes in the Japanese Political Landscape: Election of a New Prime Minister

The most significant shift in Japan’s political landscape is the election of a new prime minister. On October 1, Shigeru Ishiba was elected as the new prime minister and announced his cabinet. Often referred to as the "opposition within the ruling party," Ishiba is known for his independent stance within the LDP. Ishiba has stated he will maintain Kishida's policy framework, so major changes are not expected.

Ishiba’s policy continuity is rooted in Japan’s unique political structure. Unlike South Korea, where a change in government between ruling and opposition parties often brings major policy shifts, Japan's Liberal Democratic Party(LDP) has held power for 12 years with a majority in the Diet. This system ensures that the LDP leader is typically elected as prime minister unless unusual circumstances arise. As a result, prime ministers from the same party are consistently elected. This allows for a natural continuation of policies. Ishiba follows this path and upholds the policies of his predecessors, Suga and Kishida.

3. Shigeru Ishiba, who is he?

Shigeru Ishiba has confirmed he will continue the policies of his predecessor Kishida, so the overall framework for Web3 industry policies is expected to stay the same. However, there may be differences in how specific policies are executed and prioritized.

Prime Minister Ishiba is widely recognized in Japanese politics for his expertise in rural development and regional balance. His previous roles as MAFF(Minister of Agriculture, Forestry and Fisheries) and Minister for Regional Revitalization highlight this. His experience as Minister for Regional Revitalization, where he led efforts to revitalize Japan’s regions and address the country’s declining population, has significantly shaped his policy direction.

Prime Minister Ishiba’s experience in regional development combined with Web3 technology will likely influence new regional growth policies. During his LDP election campaign, he introduced the “Regional Development 2.0” policy, which includes plans to use NFTs and blockchain to revitalize local areas. The goal is to enhance the value of a region's unique assets, such as specialty foods and unique tourism experiences, through Web3 technology.

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