🇯🇵Japan

Detailed overview

Japan: Cryptoasset Exchange, Stablecoins, and FIEA Overlay

Japan regulates cryptoasset and stablecoin activity through activity-specific regimes rather than a single generic “crypto licence.” The principal regime for spot crypto exchange, brokerage, custody, and wallet-management services is the cryptoasset exchange service provider registration regime under the Payment Services Act. The Financial Services Agency states that, from 2017-04-01, a new cryptoasset regime began and that a business providing domestic exchange services between cryptoassets and legal currency requires cryptoasset exchange business registration.

Under the Payment Services Act, a person may not provide cryptoasset exchange services unless registered by the Prime Minister. The statutory definition of “cryptoasset exchange service” covers buying, selling, or exchanging cryptoassets; intermediary, brokerage, or agency activity for those transactions; managing users’ money in connection with those acts; and managing cryptoassets for others, subject to statutory carve-outs.

Japan’s fiat-linked stablecoin regime is separate. From 2023-06-01, Japan introduced regimes for electronic payment instruments service providers and electronic settlement handling businesses. The FSA states that conducting those businesses domestically requires registration under the Payment Services Act and the Banking Act, respectively, and identifies the activity as intermediation and related business for so-called stablecoins linked to the value of legal currency. Under the Payment Services Act, a person may not provide electronic payment instruments services unless registered by the Prime Minister.

The Payment Services Act distinguishes cryptoassets from electronic payment instruments. A “cryptoasset” excludes Japanese currency, foreign currency, currency-denominated assets, and certain electronic payment instruments; it also excludes electronically recorded transferable rights covered by the Financial Instruments and Exchange Act. A fiat-redeemable stablecoin that is treated as an electronic payment instrument should therefore not be analysed as an ordinary cryptoasset exchange token. Stablecoin issuance, redemption, intermediation, custody, transfer, and distribution require separate analysis across the Payment Services Act, Banking Act, Trust Business Act, fund transfer rules, and AML/CFT rules. FSA materials classify digital-money-like stablecoins as electronic payment instruments and state that issuance/redemption of this digital-money-like category is treated as funds transfer activity, with current issuer channels including banks, funds transfer service providers, and trust-company structures.

Tokens that constitute securities, collective-investment interests, electronically recorded transferable rights, or cryptoasset derivatives require Financial Instruments and Exchange Act analysis. FSA materials state that cryptoasset derivatives were added to the FIEA regulatory perimeter and that a business conducting over-the-counter cryptoasset derivatives requires Type I financial instruments business registration. Security-token offerings and tokenised investment interests may require securities disclosure, Type I or Type II financial instruments business registration, investment management / advisory registration, or other FIEA permissions depending on the rights attached to the token.

Japan is also in transition. A 2025 Payment Services Act amendment created a new intermediation category for electronic payment instrument / cryptoasset services and introduced additional measures including domestic asset-holding orders and flexibility for certain trust-type stablecoin reserve assets; FSA implementing instruments were under official public-comment and promulgation / enforcement procedures. Separately, a bill submitted to the 221st Diet on 2026-04-10 would transfer cryptoasset transaction regulation from the Payment Services Act to the Financial Instruments and Exchange Act and introduce enhanced disclosure, market-conduct, unregistered-operator, and insider-trading rules for cryptoassets. As of this session, the Diet record showed the bill as submitted, with no promulgation date or law number recorded; it should therefore be treated as pending, not current controlling law.

Regulator: Financial Services Agency and Local Finance Bureaus in practice; statutory registration powers are framed through the Prime Minister and related delegated authorities. Core routes: Payment Services Act registration for cryptoasset exchange services; Payment Services Act registration for electronic payment instruments services; Banking Act analysis for electronic settlement handling; Financial Instruments and Exchange Act registration for security tokens, derivatives, and investment products; AML/CFT and Travel Rule compliance under the Act on Prevention of Transfer of Criminal Proceeds and related regulations.

Question presented and assumptions

Question presented: What Japan legal/regulatory entry should be added to the Licentium jurisdiction hub for cryptoasset / digital-asset licensing and market-entry purposes?

Assumptions: The intended hub entry is for firms providing cryptoasset exchange, brokerage, custody, wallet, token listing, stablecoin intermediation, stablecoin issuance, transfer, security-token, derivative, investment-token, staking, or related Japan-facing services. No specific facts are supplied about Japanese establishment, local solicitation, customer location, token legal rights, stablecoin redemption claim, issuer structure, reserve model, custody / private-key control, fiat flows, derivatives, leverage, or whether the token is a cryptoasset, electronic payment instrument, electronically recorded transferable right, collective-investment interest, security, deposit claim, or trust beneficiary interest.

Jurisdiction profile

Japan’s authoritative promulgation channel is the Official Gazette. The Japanese Law Translation Database, operated by the Ministry of Justice, states that only the original Japanese texts of laws and regulations have legal effect and that, for legal application, users should consult the original Japanese texts published in the Official Gazette. The National Printing Bureau’s Official Gazette site is a Cabinet Office Gazette publication site and publishes the Gazette on administrative-agency business days.

For consolidated legislation, e-Gov Law Search is the official government law-search service used here as the current-law finding aid and current consolidation channel. The e-Gov search result for the Payment Services Act identifies it as Act No. 59 of 2009 and marks “未施行あり”: uncommenced provisions exist, which is important for the 2025 amendment and pending implementation analysis. e-Gov also hosts the Financial Instruments and Exchange Act and the Act on Prevention of Transfer of Criminal Proceeds.

The Financial Services Agency is the main administrative source for cryptoasset exchange business, electronic payment instruments, financial instruments business, supervision, public warnings, and registers. The FSA maintains official lists of registered cryptoasset exchange service providers and electronic payment instruments service providers and also publishes lists of warned unregistered operators.

Case-law materials are available through the Courts in Japan judgment search system. The court site states that the judgment search system can search Supreme Court and lower-court decisions, but also notes that not all judgments are included. No case law is relied on in this session; therefore no subsequent-history or later-treatment analysis is required.

Hierarchy used in this analysis: statutes and cabinet / cabinet-office / ministerial orders are binding; FSA notices, supervisory guidelines, warnings, Q&A, public-comment papers, and explanatory materials are official administrative materials and are used only for regulatory practice, implementation status, and current regulator interpretation. Japanese original statutory text controls over English renderings.

Executive summary

• Japan has no single generic “crypto licence.” The live regime is activity-based: cryptoasset exchange services are regulated under the Payment Services Act; stablecoin intermediation is regulated through electronic payment instruments and electronic settlement handling regimes; security tokens and derivatives are regulated under the Financial Instruments and Exchange Act.
• A person may not provide cryptoasset exchange services unless registered. The statutory service perimeter includes cryptoasset purchase / sale / exchange, brokerage / intermediary / agency activity, management of users’ money connected with those acts, and management of cryptoassets for others.
• Cryptoasset exchange registration is substantive. The Prime Minister must refuse registration if the applicant does not meet requirements including company form / Japan-office requirements for foreign operators, Japan representative requirements, financial foundation, operational systems, compliance systems, and certified-association or equivalent internal-rule arrangements.
• Cryptoasset exchange service providers must implement user-protection controls, including information-security measures, outsourcing controls, advertising restrictions, customer explanations, segregation of users’ money and cryptoassets, periodic audit, and performance-guarantee cryptoassets for certain online-managed holdings.
• Unregistered foreign cryptoasset exchange service providers may not solicit persons in Japan. FSA warning materials also show that internet-based services to Japanese residents have been treated as unregistered cryptoasset exchange activity.
• Fiat-linked stablecoin intermediation is generally not analysed as ordinary cryptoasset exchange. Since 2023-06-01, Japan has required registration for domestic electronic payment instruments services under the Payment Services Act and electronic settlement handling under the Banking Act.
• Electronic payment instruments service providers must be registered and must comply with user-protection, information-security, issuer-contract, segregation, audit, books, and reporting requirements.
• AML/CFT and Travel Rule controls apply to cryptoasset and electronic payment instrument activity. FSA official materials state that the 2023 amendments established notification obligations for cryptoasset and electronic payment instrument transfers, effective 2023-06-01; FSA supervision materials specifically flag unhosted-wallet transfers as higher risk when no Travel Rule notice accompanies the transfer.
• The 2026 FIEA / Payment Services Act bill is important but pending. The FSA and Cabinet Legislation Bureau state that the bill would move cryptoasset transaction regulation from payment-services regulation to financial-instrument transaction regulation, but official Diet records as of this session showed submission on 2026-04-10 and no promulgation date or law number.

Analysis by issue

Is Japan a single “crypto licence” jurisdiction?

Conclusion: No. Japan is an activity-based jurisdiction. The website entry should refer to Payment Services Act registration, electronic payment instruments / stablecoin intermediation registration, Banking Act electronic settlement handling, and FIEA overlays rather than a single “Japan crypto licence.”

Rule: The FSA states that a domestic service exchanging cryptoassets and legal currency requires cryptoasset exchange business registration, and separately states that electronic payment instruments services and electronic settlement handling businesses began under a new regime from 2023-06-01, with registration required under the Payment Services Act and Banking Act. The Payment Services Act defines cryptoassets separately from electronic payment instruments, and excludes currency-denominated assets and certain electronic payment instruments from the cryptoasset definition. FSA materials on cryptoasset derivatives state that over-the-counter cryptoasset derivatives conducted as a business require Type I financial instruments business registration under the FIEA.

Application: The Japan hub entry should begin by classifying the activity and the token. A spot exchange for BTC / ETH-type cryptoassets is primarily a Payment Services Act cryptoasset exchange analysis. A fiat-redeemable stablecoin intermediary is primarily an electronic payment instruments / Banking Act analysis. A token representing equity, debt, collective-investment rights, revenue participation, or derivatives exposure is primarily a FIEA analysis. A firm may need more than one route if it combines spot crypto, stablecoin, custody, derivatives, tokenised securities, and investment services.

Limitations / counterarguments: The 2026 bill would materially reorganise the cryptoasset perimeter by moving cryptoasset transaction regulation to the FIEA. That bill is not treated as current law because official Diet materials showed no promulgation date or law number as of this session.

Cryptoasset exchange service registration under the Payment Services Act

Conclusion: A firm conducting cryptoasset exchange, brokerage, agency, intermediation, fiat / crypto conversion, crypto / crypto conversion, or custody / management for Japanese users should begin with cryptoasset exchange service provider registration analysis.

Rule: Article 63-2 of the Payment Services Act states that no person may provide cryptoasset exchange services unless registered by the Prime Minister. Article 2(15) defines cryptoasset exchange services to include purchase and sale of cryptoassets or exchange with other cryptoassets; intermediary, brokerage, or agency activity for those acts; management of users’ money in connection with those acts; and management of cryptoassets for others, except where another statute separately regulates the activity.

Article 63-5 requires refusal of registration where the applicant falls within statutory disqualification items. These include, among other items, not being a stock company or qualifying foreign cryptoasset exchange service provider with a Japan business office, lack of a Japan representative for a foreign provider, lack of sufficient financial foundation, lack of proper operational systems, lack of legal-compliance systems, and lack of certified-association membership or equivalent internal rules and compliance systems.

Application: A Japan-facing exchange or custodian should prepare for a full regulatory application, not a light notification. The application should address entity form, Japan office / representative, capital and net assets, governance, directors and officers, systems security, outsourcing, internal controls, user-asset segregation, token review, AML/CFT, complaint handling, audit, and association or equivalent rule arrangements. A pure non-custodial software provider may fall differently, but the outcome depends on whether it touches transactions, order routing, brokerage, custody, keys, or users’ money.

Limitations / counterarguments: The statutory phrase “manage cryptoassets for others” requires fact-specific analysis for staking, wallet infrastructure, MPC custody, omnibus wallets, smart-contract control, hosted wallets, and outsourced custody. A token that is not a “cryptoasset” because it is an EPI or a FIEA-regulated right will change the route.

User protection, custody, advertising, and insolvency protections for cryptoasset exchange service providers

Conclusion: Japan imposes detailed conduct and custody requirements on registered cryptoasset exchange service providers. These requirements are central to licensing and post-registration operation.

Rule: The Payment Services Act requires cryptoasset exchange service providers to implement information-security measures and outsourcing controls. Advertising must identify the provider as registered, give its registration number, state that cryptoassets are not Japanese or foreign currency, and disclose material characteristics specified by Cabinet Office Order. Prohibited acts include false or misleading representations and representations encouraging purchase or exchange of cryptoassets solely for profit rather than payment use.

Article 63-11 requires segregation of users’ money from the provider’s own money, trust of users’ money with a trust company or equivalent, segregation of users’ cryptoassets from the provider’s own cryptoassets, low-risk management of user cryptoassets as specified by Cabinet Office Order, and periodic audit by a certified public accountant or audit corporation. Article 63-11-2 requires performance-guarantee cryptoassets for certain user cryptoassets managed in online / convenience-related methods. Article 63-19-2 gives a user who contracted for cryptoasset management a preferential right to payment from the segregated target cryptoassets and performance-guarantee cryptoassets.

Application: A Japanese licence narrative should include custody and insolvency protections. For a practical application, the firm should demonstrate customer-money trust arrangements, wallet segregation, cold-storage / low-risk management, hot-wallet risk controls, performance-guarantee assets, audit readiness, disclosure wording, advertising review, and incident / cyber controls. A hub entry that describes Japan as merely requiring “registration” would understate the operational burden.

Limitations / counterarguments: Detailed percentages, technical standards, segregation mechanics, audit periods, and reporting formats are in Cabinet Office Orders and FSA supervisory materials. Those should be re-checked in e-Gov and FSA’s current supervisory-guideline repository before publishing operational checklists.

Stablecoins and electronic payment instruments

Conclusion: Fiat-linked stablecoin activity in Japan should be analysed under the electronic payment instruments and electronic settlement handling regimes, not only under the cryptoasset exchange regime.

Rule: The FSA states that, from 2023-06-01, new regimes for electronic payment instruments service providers and electronic settlement handling businesses began, and that domestic operation requires registration under the Payment Services Act and Banking Act, respectively. The FSA describes the relevant note as business of intermediating so-called stablecoins linked to legal-currency value.

Article 2(5) of the Payment Services Act defines electronic payment instruments by reference to electronically recorded currency-denominated value usable with unspecified persons for payment and purchasable / sellable with unspecified persons, electronically transferable property value, specified trust beneficiary interests, and equivalents. Article 2(10) defines electronic payment instruments services to include purchase / sale / exchange of electronic payment instruments, intermediary / brokerage / agency activity, management of electronic payment instruments for others, and certain account-increase / account-decrease activity for funds transfer service providers. Article 62-3 prohibits providing electronic payment instruments services without registration.

FSA explanatory material classifies digital-money-like fiat stablecoins as electronic payment instruments, describes them as stable-value instruments issued at a fiat-linked price and redeemable at the same issue price or equivalent, and contrasts them with algorithmic or other cryptoasset-type stablecoins. The same FSA material states that issuance and redemption of the digital-money-like category are funds transfer transactions and that current issuer channels include banks, funds transfer service providers, and trust-company structures.

Application: A firm offering, distributing, listing, transferring, or holding fiat-redeemable stablecoins for Japan users should first classify the token. If the token is a digital-money-like stablecoin, the EPI framework is likely central. If the token is algorithmic or not redeemable at fiat value, it may instead be cryptoasset-type or FIEA-regulated depending on rights and structure. EPI intermediaries should prepare issuer contracts, user-protection disclosures, segregation, audit, books, reporting, and AML/CFT controls.

Limitations / counterarguments: Stablecoin classification depends on redemption rights, issuer liability, reserve assets, trust structure, transferability, whether the token is currency-denominated, whether it is a specified trust beneficiary interest, and whether it constitutes a security or collective-investment interest. Banking Act electronic settlement handling and Trust Business Act issues were identified but not fully analysed here because no product structure was supplied.

Electronic payment instruments service provider obligations

Conclusion: EPI service provider registration is a regulated financial-services route with conduct, custody, issuer-contract, audit, and reporting obligations.

Rule: Article 62-6 requires refusal of EPI service provider registration where the applicant does not meet requirements including company form, Japan office and representative requirements for foreign providers, financial foundation, proper operational systems, compliance systems, and certified-association or equivalent rule arrangements. Article 62-10 requires information-security measures; Article 62-11 requires controls over outsourced service providers; Article 62-12 requires user-protection measures, including explanation to prevent users from mistaking the EPI service for the business of a bank, funds transfer service provider, or specified trust company, and information about the EPI, fees, and contract terms.

Article 62-13 prohibits EPI service providers from receiving deposits of users’ money or other property, except in limited cases specified by Cabinet Office Order. Article 62-14 requires segregation of users’ EPIs from the provider’s own EPIs and periodic audit by a certified public accountant or audit corporation. Article 62-15 requires contracts with issuers or relevant funds transfer service providers covering liability allocation and other Cabinet Office Order items. Articles 62-18 and 62-19 require books and periodic reports, including additional reports for providers managing users’ EPIs.

Application: A stablecoin intermediary cannot be described as simply “registering a stablecoin platform.” A Japanese EPI intermediary should prepare issuer / distributor contracts, segregation arrangements, CPA audit readiness, customer disclosures, no-deposit controls, books and reports, complaint / dispute-resolution arrangements, information-security and outsourcing controls, and AML/CFT procedures.

Limitations / counterarguments: The issuer’s own regulatory status may be bank, funds transfer service provider, trust company, specified trust company, or another structure. The EPI service provider’s obligations may differ depending on whether it buys/sells, intermediates, manages EPIs, or performs funds-transfer account increase/decrease activity.

FIEA overlay: security tokens, investment tokens, and cryptoasset derivatives

Conclusion: Tokenised investment products and cryptoasset derivatives are not covered solely by Payment Services Act registration. FIEA analysis is required.

Rule: FSA official materials state that the 2019 amendments, effective in 2020, added cryptoasset derivatives to the FIEA regulatory scope and that conducting over-the-counter cryptoasset derivatives as a business requires Type I financial instruments business registration. The same FSA materials state that where investors receive profit-distribution rights in a token structure, issuance of tokens in exchange for cryptoassets is clarified as subject to the FIEA, and disclosure and sales / solicitation rules apply to issuers and intermediaries.

Application: A tokenised share, bond, fund interest, collective-investment interest, STO token, revenue-sharing token, derivative token, leveraged crypto product, CFD, option, swap, or crypto investment-management product should be reviewed under the FIEA. Required routes may include Type I financial instruments business, Type II financial instruments business, investment management, investment advisory / agency, securities disclosure, electronic record transfer rights rules, market conduct rules, and professional-investor limitations.

Limitations / counterarguments: Whether a token is a security, electronically recorded transferable right, collective-investment interest, derivative, or ordinary cryptoasset depends on rights, issuer obligations, profit distribution, pooling, management discretion, transferability, technical restrictions, solicitation method, and investor category.

AML/CFT, Travel Rule, unhosted wallets, and sanctions controls

Conclusion: Japan treats cryptoasset exchange and EPI activity as AML/CFT-regulated activity, including customer verification and Travel Rule controls.

Rule: FSA official materials on the 2023 implementation state that government orders were promulgated and public-comment results published for measures including addition of EPI service providers as specified business operators, creation of notification obligations for cryptoasset and EPI transfers: the Travel Rule, measures for unhosted-wallet and related transactions, and counterparty AML-status confirmation when concluding transfer-related tie-up contracts; the implementation date was 2023-06-01. NPA / JAFIC’s 2025 annual report states that funds transfer service providers and electronic payment instruments service providers, including cryptoasset exchange service providers, owe identity-verification obligations when conducting specified funds-transfer or EPI-transfer transactions. FSA supervisory guidance for cryptoasset exchange service providers identifies transfers to or from unhosted wallets that do not involve Travel Rule notices as generally higher risk because of anonymity and absence of transfer restrictions.

Application: A Japan-facing crypto or stablecoin service should prepare customer due diligence, beneficial-owner verification, transaction monitoring, suspicious-transaction reporting, sanctions screening, Travel Rule messaging, counterparty VASP due diligence, unhosted-wallet risk assessment, and governance reporting to the board or equivalent management body. The controls should cover cryptoasset transfers, EPI transfers, wallet withdrawals, deposits, and cross-border flows.

Limitations / counterarguments: The exact Travel Rule workflow depends on whether transfers are hosted-to-hosted, hosted-to-unhosted, unhosted-to-hosted, intra-platform, cross-border, omnibus-custody, or issuer-directed. Detailed thresholds, exceptions, and notification fields should be checked in the Act on Prevention of Transfer of Criminal Proceeds, its implementing regulations, and current FSA / NPA materials.

Foreign operators and online solicitation into Japan

Conclusion: Offshore location does not itself remove Japan perimeter risk where Japanese residents are solicited or served online.

Rule: Article 63-22 of the Payment Services Act prohibits an unregistered foreign cryptoasset exchange service provider from soliciting persons in Japan for acts covered by the cryptoasset exchange service definition. The FSA’s unregistered-operator list states that warned listed operators were confirmed, at the time of warning, to have violated Article 63-2 by conducting unregistered cryptoasset exchange business, and the list includes examples where operators were conducting cryptoasset exchange business with Japanese residents through the internet. The same FSA list cautions users that cryptoasset exchange service providers require FSA / Local Finance Bureau registration.

Application: A foreign exchange, broker, wallet, app, liquidity venue, or OTC desk should not assume that avoiding a Japanese entity is sufficient. Japanese-language websites, Japan-resident onboarding, yen rails, Japan-targeted ads, affiliate campaigns, local influencers, Japanese customer support, Japanese app-store availability, and acceptance of Japan-resident customers may trigger Japanese perimeter risk.

Limitations / counterarguments: The precise legal conclusion depends on solicitation, acceptance of Japanese residents, marketing, contracting location, operational role, custody, order-routing, and whether geo-blocking / onboarding restrictions are effective.

Pending and transitional reforms

Conclusion: Japan should be described as a live transition jurisdiction. The current hub entry should include a reform note but should not state that the 2026 FIEA migration is already operative.

Rule: The FSA’s 2025 public-comment page states that the Payment Services Act amendment, Law No. 66 of 2025, was enacted on 2025-06-06 and that implementing orders and Cabinet Office Orders covered domestic asset-holding orders for EPI providers and cryptoasset exchange service providers, reserve-asset flexibility for certain trust-type stablecoins, and a new electronic payment instrument / cryptoasset service intermediation business category. The same page stated that, after the public comment, promulgation and enforcement procedures were planned.

For the 2026 broader reform, the FSA states that a bill to amend the FIEA and Payment Services Act was submitted on 2026-04-10. The Cabinet Legislation Bureau states that the reason for the bill is to treat cryptoasset transactions as financial-instrument transactions rather than payment-settlement services, and to establish systems including cryptoasset information disclosure and insider-trading regulation. The House of Councillors bill page showed the bill as Cabinet-submitted bill No. 57, submitted on 2026-04-10, and did not show promulgation date or law number.

Application: The website should include two reform notes. First, Law No. 66 of 2025 and its implementing instruments affect cryptoasset / EPI intermediation, domestic asset-holding, and trust-type stablecoin reserve management; check operative commencement and final Cabinet Office Orders before publication. Second, the 2026 FIEA migration bill may materially change the licensing architecture, but it should be described as pending unless and until enacted and commenced.

Limitations / counterarguments: Enacted text, commencement orders, Cabinet Office Orders, FSA supervisory guidelines, and transitional provisions may differ from explanatory materials. A final publication update should re-check e-Gov, Official Gazette, FSA, and Diet records.