Asia Web3 Alliance Japan has officially submitted a proposal to the US Securities and Exchange Commission’s (SEC) Crypto Task Force, urging the establishment of a collaborative regulatory partnership between Japan and the United States to advance tokenization and web3 development.
The proposal, dated March 25 and addressed to Commissioner Hester Peirce, highlights the need for a coordinated effort to reduce regulatory uncertainty, align legal frameworks, and promote inclusive digital asset markets. It calls for structured collaboration between the SEC and Japanese authorities, including the Financial Services Agency (JFSA), the Ministry of Economy, Trade and Industry (METI), and the Bank of Japan (BOJ), to develop shared standards for tokenized assets and blockchain innovation.
One of the key concerns outlined in the proposal is the lack of a clear classification system for tokens, which poses compliance risks for Japanese web3 startups. The absence of a formal regulatory pathway for token offerings has also hindered the ability of emerging companies to launch products domestically or expand globally. Despite efforts to modernize the digital asset policy environment in Japan, regulatory guidance remains fragmented and burdensome, leading to delays and increased operational costs for startups.
To address these challenges, the Asia Web3 Alliance is proposing the launch of a US-Japan Tokenization and Web3 Regulatory Collaboration Program. This initiative aims to develop a harmonized token classification framework, establish regulatory interoperability for cross-border issuance, and introduce a safe harbor mechanism for startups to operate within a supervised sandbox environment. The proposal also calls for shared standards on token trading and custody, as well as the creation of a bilateral web3 regulatory roundtable to facilitate ongoing dialogue and coordination between regulators.
As a next step, the alliance is seeking a virtual planning meeting with the SEC’s Crypto Task Force and relevant Japanese agencies to initiate discussions. Additionally, it is proposing the formation of a joint working group of legal and policy experts to identify regulatory gaps and common ground between both countries. As part of a pilot phase, the alliance suggests selecting several US and Japanese startups to participate in a cross-border sandbox to test compliant token issuance under the new framework.
Overall, the proposal emphasizes the importance of collaboration between Japan and the United States to create a safe, innovative, and inclusive digital financial system. By establishing a joint regulatory partnership, both countries can work towards fostering sustainable development in tokenized economies and promoting growth in the web3 space.