The Asia Web3 Alliance Japan has taken a significant step toward global Web3 collaboration by submitting a proposal to the U.S. Securities and Exchange Commission’s Crypto Task Force. The proposal emphasizes the need for a strategic partnership between the SEC, Japan’s Financial Services Agency, the Ministry of Economy, Trade and Industry, and the Bank of Japan. The primary objective is to create a clear regulatory framework that enhances interoperability between the two markets and fosters Web3 innovation.

A key component of the proposal is the development of a standardized classification framework for digital assets. By clearly distinguishing between tokenized securities, utility tokens, and non-security digital assets, the alliance aims to resolve regulatory ambiguity that has long plagued the industry. This framework would align with international regulatory efforts while allowing for innovation within compliant boundaries.

The initiative also advocates for a safe harbor mechanism, providing early-stage token projects with a controlled regulatory environment before full compliance is required. This model, inspired by similar approaches under consideration in the U.S., would allow startups to experiment and refine their projects without facing immediate legal and financial hurdles.

Cross-border token issuance and trading standards are another focal point of the proposal. By establishing uniform guidelines for token custody and trading, the collaboration seeks to enhance investor confidence and streamline compliance processes. The proposed mutual recognition framework would allow compliant tokenized offerings to operate freely between the U.S. and Japan, eliminating legal and tax uncertainties that currently hinder Web3 innovation.

A central feature of the proposal is the formation of a U.S.–Japan Web3 regulatory roundtable. This initiative would bring together regulators, legal experts, and industry leaders from both nations to share policy developments, case studies, and research insights. By fostering regular discussions, the roundtable aims to ensure a more synchronized approach to Web3 regulation, reducing friction for businesses operating in both jurisdictions.

Regulatory uncertainty remains one of the biggest challenges for Web3 startups, particularly when it comes to distinguishing between different types of tokens and navigating compliance requirements across multiple jurisdictions. The Asia Web3 Alliance believes that a U.S.–Japan partnership could serve as a model for international regulatory cooperation in the Web3 space.

As a next step, the alliance has suggested an initial planning meeting between SEC officials and Japanese regulators. Additionally, the selection of pilot projects to test cross-border tokenization frameworks would help refine the regulatory approach before full-scale implementation. This initiative could mark a pivotal moment in the evolution of global Web3 governance, offering greater clarity and stability to the rapidly expanding industry.