Asia Web3 Alliance Japan has formally submitted a proposal to the US Securities and Exchange Commission’s (SEC) Crypto Task Force, urging the creation of a joint 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, called for a coordinated effort to reduce regulatory uncertainty, align legal frameworks, and foster inclusive digital asset markets.
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), to develop shared standards for tokenized assets and blockchain innovation.
The proposal emphasized that the lack of legal clarity and interoperability between jurisdictions remains a significant barrier to the sustainable development of tokenized economies in both nations.
Asia Web3 Alliance President Hinza Asif said:
“Tokenization will be a foundational pillar of future economies. Japan and the United States share a responsibility to co-create a safe, innovative, and inclusive digital financial system.”
Industry concerns
The proposal outlines several areas of concern for Japanese web3 startups, including the lack of a clear classification system for tokens.
Many projects struggle to determine whether their assets qualify as securities, commodities, stablecoins, or utility tokens, which significantly raises compliance risks.
Additionally, the absence of a formal regulatory pathway for token offerings has made it difficult for emerging companies to launch products domestically or expand globally.
The alliance noted that while Japan has taken steps to modernize its digital asset policy environment, regulatory guidance remains fragmented and overly burdensome.
Startups must navigate inconsistent tax treatment and duplicative legal reviews, often leading to delays and increased operational costs. Without regulatory reciprocity, many firms are also excluded from participating in the US market, further limiting their access to capital and strategic partnerships.
Core objectives
To address these challenges, the alliance is proposing the launch of a US-Japan Tokenization and Web3 Regulatory Collaboration Program.
The initiative would prioritize the development of a harmonized token classification framework, enabling both governments to define categories such as “tokenized securities,” “utility tokens,” and “non-security digital assets” using consistent language. It also recommended guidance on distinguishing between native digital assets and traditional financial instruments issued via blockchain technology.
Another core element of the proposal is regulatory interoperability. The alliance is encouraging mutual recognition of compliant tokenized offerings, allowing cross-border issuance with reciprocal disclosure requirements.
To support innovation at the early stages, the proposal advocates for the introduction of a safe harbor mechanism in Japan modeled after the SEC’s discussions. This mechanism would allow startups to operate within a supervised sandbox environment with a clear path to compliance.
Shared standards
The proposal also addresses the need for shared standards on token trading and custody. It urged regulators to build a common framework for licensed custodians and trading platforms, making it easier to list and transfer tokenized assets recognized in both jurisdictions.
Furthermore, it calls for the creation of a bilateral web3 regulatory roundtable to support ongoing dialogue, share policy updates, and coordinate joint research.
As a next step, the alliance has requested a virtual planning meeting with the SEC’s Crypto Task Force and relevant Japanese agencies to initiate discussions.
It is also proposing the formation of a joint working group of legal and policy experts to map regulatory gaps and common ground between both countries.
As part of a pilot phase, the alliance suggested selecting several US and Japanese startups to participate in a cross-border sandbox to test compliant token issuance under the new framework.
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