The Asia Web3 Alliance Japan has presented a proposal to the Crypto Task Force of the U.S. Securities and Exchange Commission, urging a cooperative approach towards tokenization and Web3 regulation.
The submission to the SEC calls for a collaborative effort involving the SEC, Japan’s Financial Services Agency, the Ministry of Economy, Trade and Industry, and the Bank of Japan to enhance regulatory clarity and encourage interoperability between both markets.
This initiative emphasizes several important goals, including the creation of a unified token classification system that distinguishes between tokenized securities, utility tokens, and non-security digital assets.
It also advocates for a safe harbor provision for early-stage token initiatives, akin to models currently being considered in the U.S., which would permit startups to experiment with their projects within a regulated framework before reaching full compliance.
Moreover, the alliance suggests the establishment of standards for cross-border token issuance, trading, and custody, with the aim of boosting regulatory consistency and building investor trust.
The proposal includes a framework for mutual recognition, enabling compliant tokenized offerings to function seamlessly across both nations, thereby alleviating legal and tax ambiguities that currently impede Web3 innovation.
U.S. and Japan Roundtable
A pivotal aspect of the proposal is the creation of a U.S.–Japan Web3 regulatory roundtable. This initiative would promote continuous dialogue among regulators, legal experts, and industry stakeholders, ensuring that both countries can exchange insights on policy developments, case studies, and research findings.
The Asia Web3 Alliance contends that regulatory ambiguity poses a significant hurdle for Web3 startups, especially when it comes to defining token categories and ensuring compliance across different jurisdictions.
The letter indicated that this collaboration would “provide guidance for differentiating native digital tokens from traditional securities issued through blockchain.”
As a subsequent step, the alliance recommends an initial planning meeting between SEC officials and Japanese regulators, along with the identification of pilot projects to evaluate cross-border tokenization frameworks.