Asia Web3 Alliance Japan Proposes Regulatory Partnership with US SEC Crypto Task Force
Asia Web3 Alliance Japan has officially presented a proposal to the US Securities and Exchange Commission’s (SEC) Crypto Task Force, advocating for a collaborative regulatory partnership between Japan and the United States to drive tokenization and web3 development forward.
The proposal, submitted on March 25 to Commissioner Hester Peirce, aims to enhance regulatory clarity, align legal frameworks, and promote inclusive digital asset markets through joint efforts.
Establishing a Structured Collaboration
The initiative seeks to establish a 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), with the goal of setting shared standards for tokenized assets and blockchain innovation.
Addressing Regulatory Uncertainty
The proposal highlights the significance of addressing the lack of legal clarity and interoperability between jurisdictions, which currently poses a major obstacle to the sustainable growth of tokenized economies in both countries.
Industry Concerns for Japanese Web3 Startups
The proposal outlines key concerns for Japanese web3 startups, particularly the absence of a clear classification system for tokens. This ambiguity often leads to compliance risks as startups struggle to determine the categorization of their assets.
Challenges Faced by Startups
Startups face challenges in launching products domestically or expanding globally due to the absence of a formal regulatory pathway for token offerings. Additionally, regulatory guidance in Japan is described as fragmented and burdensome, resulting in delays and increased operational costs for emerging companies.
Core Objectives of the Proposal
To tackle these challenges, the alliance proposes the launch of a US-Japan Tokenization and Web3 Regulatory Collaboration Program. This program aims to develop a harmonized token classification framework and encourage regulatory interoperability between the two countries.
Focus on Shared Standards
The proposal also emphasizes the need for shared standards on token trading and custody. It recommends the creation of a common framework for licensed custodians and trading platforms to facilitate the listing and transfer of tokenized assets across jurisdictions.
Next Steps
As a next step, the alliance has requested a virtual planning meeting with the SEC’s Crypto Task Force and relevant Japanese agencies to kickstart discussions. Additionally, the formation of a joint working group of legal and policy experts is proposed to identify regulatory gaps and areas of alignment between the US and Japan.
Innovative Pilot Phase
As part of a pilot phase, the alliance suggests selecting US and Japanese startups to participate in a cross-border sandbox to test compliant token issuance under the proposed framework. This initiative aims to drive innovation and regulatory cooperation in the tokenization space.
