--- title: "Japan Crypto Regulation Monitor | cryptoassets.gi" canonical: https://cryptoassets.gi/jurisdictions/japan-crypto-digital-asset-regulation/ source_html: /jurisdictions/japan/index.html description: "Japan crypto asset regulation: 9 categories, 52 sourced findings, updated 2026-11-04. Licensing, token classification, stablecoins, tax treatment." generated_at: 2026-11-07T14:19:44Z content_sha256: c311afa5ac4963b639a592cca296f145a82b3a3ececcd8023f73830f4974180c generator: "fe-fleet/md-twin@1.0" --- # Japan Crypto & Digital Asset Regulation schema crypto-v2.0.0 trajectory: not yet assessed in transition overlaps: [Sentinel (AML/CFT)](https://sentinel.gi/jurisdictions/japan/), [World Payments](https://payments.gi/jurisdictions/japan/) Last updated 2026-11-04 · 9 categories · 52 sourced findings · 50 sources in the cumulative register Download report (PDF) Expand all Evidence re-verified: 2026-11-04 · Position last changed: 2026-11-04 · Record history & provenance ▾ Methodology & record provenance: Module confidence is derived from the underlying claims (source tier and primary excerpt retention), while statutory legal force is tracked independently. Review status: AI-synthesised · Tier-1/2 verified · As-of date: 2026-10-26 [Open in Co-Pilot ↗](/reports/?type=copilot&j=JAPAN)[Build Report](/reports/?j=JAPAN)[Compare](/compare/?j=JAPAN) Framework posture In transition 8 of 9 modules populated · AI-synthesised · Tier-1/2 verified Lead supervisory authority Crypto-Asset Exchange Service Providers Primary statutory & supervisory perimeter Next milestone (> 2026-10-26) 2026-Q4 FIEA full Cabinet-order implementation and crypto tax reform Cabinet order Module coverage & confidence 8 / 9 modules assessed 0 Confirmed · 8 Probable · 0 Uncertain · 1 Not yet assessed 9 Categories 0 Moved this cycle 0 Key judgments 3 Open gaps 52 Findings 8 Tier-1 sources Confidence mix 9 unpopulated (sums to 9 rendered categories; click to filter) No categories moved this cycle. ## Jurisdiction lead brief ###### Latest update · 4 November 2026 #### Lead Signal Japan's crypto framework is mid-migration between two statutory regimes. The Financial Instruments and Exchange Act was amended on 15 July 2026 and promulgated on 23 July 2026, moving crypto-asset regulation out of its current home in the Payment Services Act and into the Financial Instruments and Exchange Act as a distinct financial-instrument category covering a defined list of 105 classified crypto assets. Commencement is expected during 2027, with the operative date to be fixed by cabinet order no later than 23 July 2027. Until that order takes effect, the Payment Services Act framework remains current law, so firms continue to operate, for now, under registration rules that are already scheduled for replacement. Alongside the migration, a 2025 amendment to the Payment Services Act created a lighter registration tier for a person who only intermediates the sale or exchange of crypto-assets under mandate from a licensed exchange service provider, shifting the compliance weight for anti-money-laundering obligations onto the principal exchange rather than the intermediary; the date this tier becomes operative had not been fixed as at the most recent corroborating report. Together these two moving parts mean that Japan's licensing perimeter is set to look materially different within roughly a year, while today's obligations continue to run on the older statute. #### Other Developments Stablecoin policy has moved in a clearly permissive direction. A Cabinet Office Ordinance amendment promulgated on 19 May 2026 formally recognised foreign-issued trust-type stablecoins as electronic payment instruments under the Payment Services Act, provided they satisfy equivalence, reserve and supervisory-cooperation conditions, with confirmation that such instruments are not treated as securities under the Financial Instruments and Exchange Act. On the domestic side, the value and transaction cap that had applied to licensed second-category funds-transfer providers issuing yen-denominated stablecoins — the tier under which the JPYC token operates — was removed, a change confirmed as at 24 August 2026. JPYC itself was separately reported to have been designated a money-transfer business by the Financial Services Agency, though the agency's own publication confirming that designation was not directly sighted. A narrower but concrete gap has opened in tax treatment: the same 15 July 2026 amendment that migrates crypto regulation into the securities statute explicitly excluded stablecoins from its scope, leaving stablecoin-denominated income without dedicated income-tax guidance at the point the amendment was reported. On cross-border movement, a Payment Services Act amendment in force since 1 June 2026 extends funds-transfer registration to cross-border collection agency arrangements unless they fall within an exempt category, and a Financial Services Agency notice dated May 2026 is reported to have updated the list of jurisdictions treated as having equivalent travel-rule regulation for transfers between exchange service providers, though that notice itself was not directly sighted. Finally, on the commercial side, SBI Holdings and Startale Group, acting through SBI Shinsei Trust Bank, announced a trust-bank-backed yen stablecoin branded JPYSC aimed at institutional users with no daily transaction cap, originally slated for a second-quarter 2026 launch; no transaction amount was disclosed and the completion status of the launch was not independently confirmed. #### Cross-Monitor Connections The funds-transfer registration extended to cross-border collection agency arrangements, and the Financial Services Agency's update to its travel-rule equivalent-jurisdiction list, both touch areas that global payments and financial-integrity oversight also track closely: registration perimeter for money movement and cross-border recognition of counterpart AML/CFT regimes sit squarely at the intersection of crypto-specific licensing and the broader payments and integrity architecture. Firms moving value into or out of Japan through exchange service providers should expect any change in the recognised-jurisdiction list to be felt first in correspondent and counterparty onboarding, not in exchange-facing rules. #### Outlook The defining date on the horizon is the cabinet order that will fix when crypto-asset regulation actually migrates from the Payment Services Act into the Financial Instruments and Exchange Act, due no later than 23 July 2027. Market participants have roughly a year's run-up in which the older registration regime still governs in practice, even as the newer statute's 105-asset classification list and heavier disclosure and insider-trading provisions are already fixed in law and merely awaiting a start date. In parallel, the stablecoin track looks settled in direction if not yet in detail: the removal of the transaction cap on the yen-stablecoin funds-transfer tier and the recognition of qualifying foreign trust-type stablecoins both point toward a more open issuance and circulation environment, while the explicit tax-treatment gap for stablecoin income is the kind of loose end that regulators or the Diet will likely need to close as institutional stablecoin products such as the announced trust-bank-backed yen coin move from announcement toward actual launch. 6 earlier updates not shown here. ###### Standing brief · as of 3 August 2026 Written before the update above. Where they differ, the update is the more recent position. #### Lead Signal Japan's Financial Services Agency finalized, on 7 July 2026, an update to the list of jurisdictions treated as equivalent for travel-rule purposes under the Act on Prevention of Transfer of Criminal Proceeds, adding five jurisdictions to the roster of foreign VASP locations to which Japanese crypto-asset exchange service providers and electronic payment instrument service providers may transfer without the full originator/beneficiary regime applying in the same manner. This is the most recently dated regulatory action in the jurisdiction this cycle and sits atop an already in-force, well-sourced travel-rule notification obligation requiring VASPs to submit originator and beneficiary information at the time of cross-border cryptoasset or electronic-payment-instrument transfers. Because the equivalent-jurisdiction mechanism moves dynamically as the FSA periodically revises the designated list, the practical scope of Japan's travel-rule regime is best tracked through ongoing FSA notices rather than treated as a static statutory perimeter. #### Other Developments The core of Japan's crypto-asset regime remains where it has long been: exchange service providers must register with the FSA and Local Financial Bureau before offering services, and settled statutory duties around user-asset segregation, price-volatility disclosure, and JVCEA-supervised advertising/solicitation rules continue in force unchanged. Against that stable baseline, the jurisdiction is mid-transition on several fronts. The Diet enacted FIEA/PSA amendments in July 2026 that reclassify crypto assets from a payment-tool framing under the Payment Services Act toward an investment-product framing under the Financial Instruments and Exchange Act, expected to take effect in fiscal year 2027 with the exact commencement date not yet published. Roughly 105 named cryptoassets, including Bitcoin and Ether, are slated for reclassification as FIEA financial products, which would bring issuer disclosure and insider-trading rules to bear -- though the final asset list and effective-date mechanics still await primary text. Two further proposals remain unresolved: an FSA working-group recommendation that would require third-party custody and trading-management providers to register before serving exchanges, whose status as a formal bill versus a non-binding recommendation is unconfirmed, and a liability-reserve mandate -- prompted by the 2024 DMM Bitcoin hack -- that would require exchanges to hold reserves against hack or operational-failure losses, contemplated for the 2026 ordinary Diet session but with an unclear relationship to the already-enacted July bill. On stablecoins, the 2023 Payment Services Act amendment's 'Electronic Payment Instruments' category continues to underpin issuance and redemption, with registered providers and banks eligible to issue under that framework and bank-issued stablecoin holders receiving deposit-insurance-analogous protection. Momentum is building on top of that base: Japan's three megabanks (MUFG, SMBC, Mizuho) are piloting a joint yen stablecoin under an FSA-backed proof-of-concept targeting live transactions during fiscal year 2026, while the FSA separately ran a public consultation, closed 27 February 2026, on eligible foreign-issued bond criteria for trust-structure stablecoin reserve assets under Act No. 66 of 2025 -- the outcome of which has not yet been located. On the tax side, current miscellaneous-income treatment of individual crypto profits, taxed progressively up to 55% with no loss offset or carry-forward, remains in force, but the same July 2026 legislative package establishes the basis for a flat rate of roughly 20% with three-year loss carry-forward targeted for January 2028; this claim rests on trade-press sourcing with no Diet or National Tax Agency primary text yet located, and the January 2028 date depends on Cabinet Office implementing-ordinance timing not yet fixed. On-chain activity outside intermediated exchange relationships -- DEX trading via non-custodial wallets, staking, validator operation, and mining -- remains outside the statutory registration perimeter; the FSA's 2025 discussion paper acknowledges this as a future area of attention without committing to a rulemaking timeline. #### Cross-Monitor Connections Several claims in this cycle route to sibling monitors rather than sitting exclusively within crypto's own analytical surface. AML/CFT supervision, the July 2026 travel-rule equivalent-jurisdiction expansion, an FSA/Ministry of Finance sanctions-screening directive to roughly 30 exchanges, and FEFTA real-estate reporting obligations extended to crypto-funded transactions by non-residents are all subscribed-surface content whose substantive illicit-finance analysis is owned by the financial-integrity module; crypto carries these here as disambiguation context only. Separately, the megabank yen-stablecoin pilot, the EPI redemption and deposit-insurance framing for bank-issued stablecoins, and the forward crypto tax reform carry payments-adjacent relevance flagged for world-payments, given the trust-as-payment-instrument framing at stake and the tax treatment's bearing on flows into regulated payment rails. #### Outlook The jurisdiction's trajectory is one of managed tightening layered onto liberalisation: licensing and classification frameworks are moving toward a heavier, securities-style perimeter even as the tax regime moves toward a lighter, flatter rate. The items most likely to move the record next cycle are the legislative status of the custodian-registration proposal, the outcome of the closed stablecoin-reserve-bond consultation, the Cabinet Office's implementing ordinance fixing the tax rate's actual effective date, and whether the exchange liability-reserve mandate is folded into the enacted July bill or remains a standalone proposal. Absent primary Diet or National Tax Agency text confirming several of these, the composed record here is held at the module-uncertainty threshold pending stronger sourcing on the transition's mechanics. Read full brief · 1626 words Key regulatory facts for Japan Regulatory Dimension Japan Standing Position Jurisdiction Japan (JP) Regulatory Scope Crypto & Digital Asset Regulation (9 modules, 52 sourced findings) Crypto Licensing Core exchange-registration duty under the Payment Services Act is settled and in force. Token Classification PSA Article 2(5) 'Crypto-Asset' taxonomy remains current and in force for Bitcoin, Ether and similar assets, focused on intermediary rather than issuer regulation. On-Chain Activity Regime No dedicated statutory regime yet covers DEX trading, staking, validator operation or mining; FSA's 2025 discussion paper flags these as future areas of attention without a rulemaking timeline. Stablecoin Regime 2023 PSA 'Electronic Payment Instruments' framework underpins stablecoin issuance by registered providers and banks (confidence capped at Probable pending re-sourcing). Primary Instruments Cited Crypto-Asset Exchange Service Providers, FIEA/PSA amendments (Diet, July 2026), Third-party crypto custody / trading-management service providers, Financial Services Agency (FSA), Payment Services Act (PSA), Japan Last Confirmed / Updated 2026-11-04 (50 sources in cumulative register) 9 of 9 categories Signal Moved Judgment Gap Density Comfortable Compact Expand all sources Reset all Selections OR within a group, AND across groups. Press / to search. ### Japan: C1 Crypto LicensingAmberEnacted in forceModule confidence: Probable▾ Core exchange-registration duty under the Payment Services Act is settled and in force. The July 2026 FIEA/PSA amendments enact a reclassification from payment-tool to investment-product regulatory framing, expected effective FY2027 (exact date unpublished). Custodian-registration and exchange liability-reserve sub-regimes remain proposed and unenacted. Open gap — crypto-int-3 No Tier-1 (FSA-hosted) page was directly retrieved this cycle; all claims rest on Tier-3/4 secondary corroboration. DeFi/validator-level on-chain activity vector under-indexed this cycle. Horizon · 2026-Q4 (± six months) FIEA full Cabinet-order implementation and crypto tax reform Cabinet order Adopted, not yet in force · Tier 3 source Horizon · 2027-Q1 (± six months) FIEA implementation targeted FY2027 Adopted · Tier 3 source Horizon · 2027-Q2 (± six months) FIEA 'specified crypto-asset' regime commencement Adopted · Tier 3 source Horizon · 2027-Q2 (± a year) FIEA crypto-asset provisions (Act No. 64/2026) commencement Adopted · Tier 3 source Horizon · 2027-Q2 (± six months) FIEA crypto-asset migration takes effect Adopted · Tier 3 source #### Crypto Licensing Japan's foundational crypto-asset licensing framework runs through the Payment Services Act (Act No. 59 of 2009): Crypto-Asset Exchange Service Providers must register with the Financial Services Agency and the Local Financial Bureau before offering exchange services in Japan, an obligation confirmed as of the FSA's registered-provider list dated 30 June 2026 and unaffected by the pending transition to a new statutory basis. This registration duty sits at the core of the regime and remains settled and in force regardless of the broader legislative changes now underway. The most consequential development this cycle is the enactment, in July 2026, of FIEA/PSA amendments that reclassify crypto assets from the Payment Services Act's payment-tool framing to a Financial Instruments and Exchange Act investment-product framing. The new regime is expected to take effect in fiscal year 2027, though the exact commencement date has not yet been published in primary Diet or FSA text -- sourcing for the enacted text itself currently rests on trade-press reporting rather than a located primary statute or ordinance. This is a structural shift in how the underlying law characterizes crypto assets, not merely an incremental amendment, and it is the reason the module's traffic light sits at amber rather than green: the core registration obligation is settled, but the statute governing that obligation is itself mid-transition. Two further licensing-adjacent proposals remain unresolved and unenacted. First, the FSA has floated a requirement that third-party crypto custody and trading-management service providers register with Japanese authorities before offering services to exchanges; this proposal's legislative status -- whether it is a formal bill working through the Diet or remains a working-group recommendation -- is not resolved by the available sourcing, and no target commencement date has been identified. Second, the FSA is reportedly planning to legally obligate exchanges to maintain liability reserves against losses from hacks or operational failures, via a bill contemplated for the 2026 ordinary Diet session; it remains unclear whether this proposal has been folded into the enacted July 2026 bill or persists as a separate initiative, and the same underlying reserve-mandate development also surfaces in this cycle's consumer_protection module, reflecting the initiative's dual relevance to licensing conduct and consumer outcomes. #### Outlook The near-term trajectory is tightening: Japan is moving its crypto-licensing perimeter from a payments-style intermediary framework toward a securities-style regime with issuer-facing obligations, while simultaneously contemplating additional custodian-registration and prudential-reserve layers on top of the existing exchange-registration duty. The questions most likely to resolve in coming cycles are whether the custodian-registration proposal advances to a formal bill, what exact date within fiscal year 2027 the FIEA-based regime takes effect, and whether the liability-reserve mandate is consolidated into the already-enacted framework or proceeds on its own legislative track. Until primary FSA or Diet text answers these questions, the transition should be tracked as a single evolving story rather than several independent developments. Read full sub-brief · 475 words Periodic update · new data 2026-10-18 #### Crypto Licensing The Financial Services Agency published, on 7 October 2026, a consolidated public list bringing together all historical warning notices issued against unregistered crypto-asset exchange operators under Article 63-2 of the Payment Services Act, as amended. The consolidated register contains twenty-five listings in total: three against domestic operators and twenty-two against overseas operators, with the most recent entry being Izakaya Limited, a Hong Kong-based operator warned on 1 September 2026. This development does not alter the underlying statutory licensing test, which continues to prohibit operating a crypto-asset exchange business in Japan without registration, but it is a material supervisory-transparency step: centralising twenty-five years' worth of scattered individual warnings into a single accessible public resource lowers the due-diligence cost for counterparties and increases the durability of the FSA's enforcement record. The FSA's own primary page for this consolidated register was not directly retrieved this cycle; the finding rests on corroborated secondary Japanese-language reporting. Separately, the 2026 FIEA/PSA amendment bill is reported to introduce enhanced criminal penalties for unregistered crypto-asset operators, with these enhanced-penalty provisions taking effect twenty days after promulgation, ahead of the main regime's expected 2027 commencement. This creates a two-stage implementation structure in which penalty enhancement precedes the broader regulatory reclassification exercise. This status has not been independently re-verified against the Diet record or Official Gazette text this cycle and rests instead on law-firm secondary commentary, so it should be treated as provisional pending primary confirmation. Taken together, these developments describe continuity in the underlying licensing framework, a registration requirement enforced through warnings and prohibition of unregistered activity, accompanied by two reinforcing moves: a more visible public enforcement record, and a prospective tightening of criminal consequences for continued non-compliance ahead of the main 2027 regime. Neither development changes Japan's substantive licensing classification test this cycle. #### Outlook The consolidated unregistered-exchange register is likely to be updated as the FSA identifies further non-compliant overseas solicitation activity; whether this is followed by more active enforcement steps against repeat or large-scale overseas offenders, as opposed to further warnings alone, is the key variable to watch. Confirmation of the enhanced-penalty provision's actual promulgation and commencement date, against a primary legislative source, would resolve the principal open uncertainty in this module for the coming cycles, particularly as the broader FIEA/PSA reclassification regime approaches its expected 2027 main commencement. 4 earlier distinct update(s) Periodic update · new data 2026-10-06 #### Crypto Licensing Japan's crypto-licensing framework currently rests on two statutes operating concurrently. Crypto-Asset Exchange Service Providers (CAESPs) must register with the Financial Services Agency (FSA) under the Payment Services Act (PSA) Article 2 definition, which covers purchase and sale of crypto-assets, exchange between crypto-assets, intermediation of either activity, and custody-only management of users' crypto-assets. More than 27 CAESPs are currently registered under this standing, in-force requirement, which has applied since 1 April 2017. Layered on top of this baseline is the FIEA/PSA Partial Amendment Act, enacted 15 July 2026, which reclassifies approximately 105 'specified crypto-assets' as financial instruments under the Financial Instruments and Exchange Act (FIEA). This imports insider-trading prohibitions and mandatory issuer disclosure obligations that did not previously apply to crypto under statute. Commencement is expected within about a year of enactment, targeted for fiscal year 2027, which means registered CAESPs and prospective entrants must track both the PSA registration regime and the forthcoming FIEA overlay simultaneously during the transition. Once the amendment commences, the maximum criminal penalty for operating an unregistered crypto-asset-related business rises from three years' imprisonment to ten years, and the Securities and Exchange Surveillance Commission gains expanded investigatory and surcharge-recommendation power over crypto-asset business conduct, powers it did not previously hold under statute for this sector. Stablecoins and non-fungible tokens are expressly excluded from the specified crypto-asset category and continue to be governed outside the FIEA framework. #### Outlook The commencement date for the FIEA 'specified crypto-asset' regime has not yet been published by the FSA; the projected window is fiscal year 2027, roughly a year after the July 2026 enactment. Firms entering or operating in the Japanese market during the intervening period face a dual-track compliance obligation, since the PSA registration requirement remains fully in force while the FIEA overlay's disclosure and insider-trading provisions, and the associated higher penalty ceiling, are enacted but not yet effective. Periodic update · new data 2026-09-21 #### Crypto Licensing Japan's crypto-asset licensing regime is comprehensive and in force but mid-transition. Crypto-asset exchange service providers must register with the FSA under the Payment Services Act, and the 2025 amendment package expands the categories of entities required to register, reaching full operative effect on 1 and 13 June 2026. Layered on top of this, the Financial Instruments and Exchange Act Amendment Bill, passed by the Diet on 15 July 2026, transfers cryptoasset business, disclosure, and unfair-trading regulation from the PSA perimeter to the FIEA perimeter, with targeted implementation as early as fiscal year 2027. The Payment Services Act amendment also creates a new lighter-touch registration category for electronic-payment-instrument and crypto-asset service intermediaries, reducing the entry barrier for intermediary-only firms distinct from full exchange-service-provider registrants. The supervisory authority for both frameworks is the Financial Services Agency. The practical effect for market participants is that the licensing perimeter itself is not in doubt, registration with the FSA is unambiguously required, but the statutory home of that registration and its accompanying disclosure and conduct obligations is actively shifting from payments law to securities law, with exact commencement dates for individual FIEA provisions, including market-abuse and disclosure rules and SESC investigative powers, not yet established beyond the general fiscal-year-2027 guidance. #### Outlook Watch for FSA or Diet clarification of specific FIEA provision commencement dates, and for early registration data under the new lighter-touch intermediary category as an indicator of market uptake ahead of the FIEA transition. Periodic update · new data 2026-09-13 #### Crypto Licensing Japan's crypto-asset licensing framework is in the midst of the most significant statutory transition since the Payment Services Act first introduced crypto-asset exchange registration in 2017. Under the standing baseline, crypto-asset exchange service providers must register with the FSA under the PSA, with unregistered operation constituting a criminal offence — this remains the in-force foundation of the licensing regime. Layered on top of that foundation, the FIEA Amendment Bill passed the Diet on 15 July 2026, beginning the migration of cryptoasset business-operator, disclosure and unfair-trading regulation from the PSA toward the Financial Instruments and Exchange Act, Japan's principal securities statute. This is an enacted-but-not-yet-effective development: the bill has passed but full Cabinet-order implementation, including the specific reserve, custody and redemption obligations that will apply under the new framework, remains pending. The most immediately consequential element of the FIEA migration is the penalty increase for unregistered exchange operation, which rises from three years' imprisonment or a JPY 3 million fine to ten years or JPY 10 million. This is a probable-confidence, T3-sourced finding tied to the same July 2026 legislative action, and it signals a marked increase in the deterrent weight Japan is placing on unlicensed crypto-asset market access, consistent with the broader securities-law-grade discipline the FIEA migration is intended to bring to the sector. The practical result for market participants is a licensing regime currently operating under dual statutory authority: the PSA registration requirement remains in force as the operative licensing gate today, while the FIEA framework is enacted and will progressively take over specific regulatory functions as Cabinet orders and FSA ordinances are issued. This transitional structure is a deliberate design feature of the migration rather than a regulatory gap, though the exact ordinance-level detail governing reserve, custody and redemption obligations was not independently retrieved from a primary FSA document this cycle. #### Outlook The Cabinet-order and FSA-ordinance detail specifying reserve, custody and redemption obligations under the FIEA migration is expected around 2026-Q4. Until that detail is published and independently confirmed, market participants should treat the PSA registration regime as the operative licensing framework while planning for the substantially higher unregistered-operation penalties that took effect alongside the FIEA Amendment Bill's passage. Periodic update · new data 2026-08-25 #### Crypto Licensing Japan's licensing architecture is mid-transition rather than settled. The foundational requirement -- that crypto-asset exchange service providers register with the FSA under the Payment Services Act, with unregistered operation a criminal offence -- remains unchanged and continues to anchor the regime as it has since April 2017. What changed materially this cycle is what sits on top of that baseline. A 15 July 2026 amendment to the Financial Instruments and Exchange Act reclassifies approximately 105 specified crypto assets as financial instruments, moving them toward a securities-style disclosure and licensing regime with an effective date of 2027. This is an enacted-but-not-yet-effective instrument: the legal change has been made, but its operative consequences for exchanges will not fully land until next year, creating an intervening period in which firms must prepare for a regime that is legally certain but not yet operationally binding. Compounding the enforcement dimension, the maximum criminal penalty for unregistered crypto-exchange operation was raised from three years and JPY 3 million to ten years and JPY 10 million for individuals, with that increase understood to have taken effect around 4 August 2026 -- already in force, unlike the FIEA reclassification itself. The practical effect for market participants is a dual-track compliance burden: PSA registration remains the baseline gate for all exchange activity, while a subset of assets moves toward a parallel, more disclosure-intensive FIEA regime whose exact perimeter -- the final list of roughly 105 specified assets -- has not yet been published. Firms currently registered and compliant under the PSA cannot yet know with certainty which of their listed assets will fall inside the reclassified perimeter, which limits how precisely they can plan disclosure and capital-treatment changes ahead of the 2027 transition. #### Outlook The critical unresolved variable is the final specified-asset list, which the FSA has not yet released. Until it appears, exchanges are effectively planning against a securities-style regime whose scope is legally fixed in principle but operationally undefined in practice. The sharply raised criminal penalty, already in force, suggests the FSA is signalling enforcement intent ahead of the more complex 2027 transition rather than waiting for the FIEA track to fully activate. Watch for the specified-asset list itself, for any FSA guidance bridging PSA and FIEA obligations during the overlap period, and for early enforcement actions under the new penalty ceiling as a signal of supervisory posture heading into 2027. Sources and findings (9) - T1 · Financial Services Agency[Crypto-Asset Exchange Service Providers](https://www.fsa.go.jp/en/regulated/licensed/en_kasoutuka.pdf) — Financial Services Agency and Local Financial Bureau before offering exchange services in Japan - T3 · CoinDesk[FIEA/PSA amendments (Diet, July 2026)](https://www.coindesk.com/policy/2026/07/15/japan-reclassifies-crypto-as-a-financial-asset-paves-way-for-tax-cuts) — New FIEA-based regime expected to take effect in fiscal year 2027 (exact commencement date not yet published) - T4 · The Block[Third-party crypto custody / trading-management service providers](https://www.theblock.co/post/378128/japan-new-rule-crypto-custody) — Japanese authorities before offering services to exchanges (FSA proposal, not yet enacted) - T4 · The Block[Financial Services Agency (FSA)](https://www.theblock.co/post/380286/japan-crypto-exchange-reserve-mandate) — liability reserves against hack/operational-failure losses, via a bill planned for the 2026 ordinary Diet session - T3[Payment Services Act (PSA), Japan](https://practiceguides.chambers.com/practice-guides/financial-services-regulation-2025/japan/trends-and-developments) — A 2025 PSA amendment permits a lighter registration for a person who only intermediates crypto-asset sale/exchange under mandate from a licensed CAESP, with AML/CFT obligations resting on the principal CAESP. - T3[Financial Instruments and Exchange Act (FIEA), Japan](https://innovationlaw.jp/en/japan-crypto-regulation-guide/) — FIEA amendment passed 15 July 2026 moves crypto-asset regulation from PSA into FIEA as a distinct financial-instrument category covering 105 classified crypto assets; expected to take effect during 2027. - T3[FSA / Act No. 64 of 2026](https://tech4impactsummit.com/blog/japan-crypto-fiea-reclassification-separate-taxation-2026/) — FIEA 'crypto-asset trading business' registration category, commencement expected during 2027 - T3[FIEA transitional regime](https://www.pro-innovation.net/blogs/posts/japan-crypto-fiea-amendment-2026-overview) — PSA-registered exchanges may continue existing business for 6 months post-effective-date without FIEA registration, extendable to 2 years if application filed within that window - T3[PSA amendment (enforcement penalty)](https://www.techtimes.com/articles/325431/20260825/japan-lifts-stablecoin-cap-fsas-dedicated-division-unlocks-institutional-yen-payments.htm) — Unregistered crypto-exchange operation: max 3yr/JPY3m -> max 10yr/JPY10m, effective ~4-5 August 2026 ### Japan: C2 Token ClassificationAmberEnacted in forceModule confidence: Probable▾ PSA Article 2(5) 'Crypto-Asset' taxonomy remains current and in force for Bitcoin, Ether and similar assets, focused on intermediary rather than issuer regulation. ~105 named assets are enacted for reclassification as FIEA financial products (effective FY2027, final list pending). Stablecoins classified separately as Electronic Payment Instruments since 2023 (confidence capped at Probable pending re-sourcing to primary FSA text). NFTs conferring goods/services rights fall outside the Crypto-Asset definition (non-normative boundary statement). Periodic update · new data 2026-10-06 #### Token Classification Japan's token-classification architecture is in the process of splitting into three distinct functional categories across two statutes. The Payment Services Act (PSA) continues to govern general 'crypto-assets' under its longstanding definition. Separately, the PSA defines a functional stablecoin test for 'Electronic Payment Instruments' (EPIs): a fiat-referenced token qualifies as an EPI where it is a transferable payment instrument denominated in, and redeemable at par in, a fiat currency, and is issued by a bank, trust company, or a registered funds transfer service provider. EPIs are expressly excluded from both the PSA's general crypto-asset treatment and from the FIEA's new 'specified crypto-asset' category, which took effect through the FIEA/PSA Partial Amendment Act enacted 15 July 2026. A Cabinet Office Ordinance promulgated 19 May 2026 created a new recognition pathway specifically for foreign trust-type stablecoins. Under this pathway, trust beneficiary rights issued under a foreign legal system may qualify as an EPI in Japan where the FSA finds the foreign issuer's home-jurisdiction regulatory and reserve-asset oversight functionally equivalent to Japan's own EPI regime, and where information-sharing arrangements exist between the FSA and the relevant foreign supervisor. This gives foreign-issued trust-type stablecoins a qualified route into Japan's EPI category that did not previously exist in the same form, provided the foreign issuer holds an overseas licence equivalent to Japan's own EPI standard with appropriate reserve-asset management and audit. #### Outlook The practical significance of this three-way split, PSA crypto-assets, PSA Electronic Payment Instruments, and FIEA specified crypto-assets, will sharpen once the FIEA overlay commences, expected around fiscal year 2027. Market participants handling tokens that sit near a classification boundary, particularly fiat-referenced instruments issued by non-bank entities, face continuing classification uncertainty until the FSA publishes further guidance distinguishing the categories in operation rather than in statute alone. Periodic update · new data 2026-09-21 #### Token Classification Japan's foundational token-classification boundary sits in Payment Services Act Article 2(5), which defines crypto-assets by exclusion of electronically recorded transferable rights under Financial Instruments and Exchange Act Article 2(3); security tokens are carved out of the PSA crypto-asset definition entirely and instead fall under FIEA's securities perimeter. This classification boundary is now being substantially redrawn by the 2026 FIEA amendment, which broadens FIEA's reach over crypto-assets generally, moving the jurisdiction toward treating most crypto-assets as financial products rather than the payments-instrument treatment that has applied to date. Stablecoins are treated as a distinct classification track, continuing to be regulated separately under Payment Services Act rules as electronic payment instruments rather than being swept into the general FIEA reclassification. This preserves a three-way classification structure going forward: security tokens under FIEA (as they always have been), general crypto-assets moving from PSA to FIEA treatment, and stablecoins remaining under PSA as electronic payment instruments. #### Outlook The practical boundary between "general crypto-assets" now moving to FIEA treatment and stablecoins remaining under PSA will be the key classification question to track as FIEA implementation detail emerges toward fiscal year 2027. Periodic update · new data 2026-09-13 #### Token Classification Japan's token-classification boundaries are actively shifting as the FIEA migration proceeds. Following the July 2026 passage of the FIEA Amendment Bill, roughly 105 crypto assets are reported to fall under FIEA classification, meaning they will be governed by disclosure and market-conduct rules akin to those applied to securities rather than continuing under the PSA's payment-services-oriented framework alone. This is a probable-confidence, T3-sourced finding, and it represents a substantive reclassification of a meaningful slice of Japan's traded crypto-asset universe rather than a narrow technical adjustment. Separately, and on a firmly established statutory basis, fiat-referenced stablecoins are classified under the PSA as electronic payment instruments (EPIs), a classification that has been in force since 2023 and is unaffected by the current FIEA migration. Under this EPI classification, stablecoin issuance is restricted to banks, trust companies, or registered funds-transfer service providers — a confirmed, in-force structural constraint that continues to shape which entities may lawfully issue a yen-pegged or other fiat-referenced stablecoin in Japan. The coexistence of these two classification tracks — the EPI framework for stablecoins under the PSA, now well-established, and the newly enacted FIEA classification for roughly 105 other crypto assets — illustrates that Japan is not moving toward a single unified crypto-asset classification regime but rather maintaining distinct statutory tracks calibrated to different token functions: payment-oriented stablecoins under PSA/EPI rules, and a broader universe of other crypto assets migrating toward securities-style FIEA treatment. #### Outlook Watch for the specific list of the roughly 105 crypto assets brought under FIEA classification, and for any Cabinet-order clarification of the classification boundary between assets remaining under PSA treatment and those migrating to FIEA disclosure and market-conduct rules. The EPI stablecoin classification is not expected to be affected by this migration and should be treated as a stable, in-force baseline for that instrument type. Periodic update · new data 2026-08-25 #### Token Classification Japan's token-classification framework is bifurcating rather than unifying. Fiat-pegged, par-redeemable stablecoins continue to be regulated as Electronic Payment Instruments (EPIs) under the Payment Services Act, a classification distinct from general crypto assets and unchanged in its core structure this cycle. What is new is the context around it: the FIEA amendment reclassifying roughly 105 specified crypto assets as financial instruments creates a second, securities-style classification track that sits alongside -- rather than replaces -- the PSA's EPI and general-crypto-asset categories. The near-term result is a two-tier system in which an asset's regulatory treatment depends on which track it falls into, with EPIs and DeFi-adjacent tokens remaining under the payments-style PSA framework while specified assets move toward FIEA's disclosure-heavy securities model from 2027. Because the final specified-asset list has not yet been published, the practical classification of any individual token outside the clearly-settled EPI category carries genuine interpretive uncertainty this cycle. #### Outlook Classification clarity will likely track the same timeline as the licensing transition: publication of the specified-asset list is the key event to watch, since it will determine which tokens move to the FIEA track and which remain under PSA treatment. Until that list appears, this module's evidence base rests on a single foundational EPI classification claim, and any near-term reclassification decisions by the FSA should be read as the primary signal of how the two-tier system will actually be applied in practice. C2 · Token Classification — Full Module Record 0 sub-modules · 180 words · 8 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login) [View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### Japan: C3 On-Chain Activity RegimeRedEnacted in forceModule confidence: Probable▾ No dedicated statutory regime yet covers DEX trading, staking, validator operation or mining; FSA's 2025 discussion paper flags these as future areas of attention without a rulemaking timeline. DEX/non-custodial-wallet transactions are not subject to the exchange-registration regime (coverage gap, negative finding). Validator/MEV conduct distinguished from front-running at a discussion-paper level (Uncertain). Periodic update · new data 2026-08-25 #### On-Chain Activity Regime This remains the thinnest-evidenced segment of Japan's crypto regime. No dedicated staking, DeFi, or mining ordinance was located this cycle, and the module's sole supporting fact is that staking rewards are taxed as income at market value upon receipt, under existing National Tax Agency guidance, pending clarification of how such rewards will be treated once the specified-crypto-asset regime takes effect. There is no first-party regulatory instrument -- proposed, enacted, or in force -- specifically addressing on-chain validator activity, DeFi protocol interaction, or mining in Japan surfaced in this cycle's research, and the underlying evidence rests on a single lower-tier source. #### Outlook This module should be treated as structurally under-indexed rather than genuinely quiet: the absence of a dedicated ordinance reflects a research gap as much as a settled policy position. The open question carried forward is whether staking and other on-chain rewards will be folded into the incoming specified-crypto-asset tax and disclosure regime or remain under the existing miscellaneous-income treatment; resolution of that question would likely also clarify the broader regulatory posture toward DeFi and validator-level activity that is currently unaddressed. C3 · On-Chain Activity — Full Module Record 0 sub-modules · 180 words · 2 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Red), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### Japan: C4 Stablecoin RegimeAmberEnacted in forceModule confidence: Probable▾ 2023 PSA 'Electronic Payment Instruments' framework underpins stablecoin issuance by registered providers and banks (confidence capped at Probable pending re-sourcing). Bank-issued deposit-type stablecoins carry deposit-insurance-analogous protection. FSA reserve-asset-bond consultation for trust-structure issuers under Act No. 66/2025 closed 27 Feb 2026 with outcome unpublished. Megabank (MUFG/SMBC/Mizuho) joint stablecoin pilot targets live transactions during FY2026 (through March 2027). Periodic update · new data 2026-10-06 #### Stablecoin Regime Japan's stablecoin regime operates through the Electronic Payment Instrument (EPI) category under the Payment Services Act (PSA), as amended in 2023 and again through developments in 2025 and 2026. EPI issuance is restricted to banks, trust companies and registered funds transfer service providers; Type II funds transfer service providers face a per-transfer ceiling historically set at JPY 1,000,000, though the FSA has signalled an intention to loosen this ceiling for institutional use cases. A 2025 PSA amendment, effective 13 June 2026, relaxed the reserve-backing requirement for trust-type EPI issuers: issuers may now hold up to 50% of backing assets in short-term Japanese Government Bonds with a maturity of three months or less, or in early-cancellable term deposits, where previously the full reserve had to be held as demand deposits. This is a liberalisation of the asset-composition rules governing reserve backing rather than a change to the overall reserve-adequacy requirement itself. A parallel development, effective 1 June 2026 through a Cabinet Office Ordinance, opened a qualified recognition pathway for foreign-issued trust-type stablecoins. The FSA will recognise a foreign-issued trust-type stablecoin as an EPI in Japan only where it is satisfied the issuer holds an overseas licence equivalent to Japan's own EPI standard, with appropriate management and audit of reserve assets, and where the foreign supervisor can share oversight information with Japanese regulators. Separately, the FSA has made on-chain finance, covering payments, securities settlement, tokenisation and cross-border transfer, a stated 2026 policy priority, announcing an 'On-chain Finance Forum for the AI Era'; no binding rule has yet issued from this initiative. #### Outlook The stablecoin regime is in force but mid-implementation: institutional pilots remain experimental and the FSA's dedicated oversight function for crypto-assets and stablecoins has only recently been stood up. The reserve-asset liberalisation and foreign-recognition pathway both point toward a regime becoming more accommodating of institutional and cross-border stablecoin activity, though the FSA's on-chain finance policy priority has not yet produced a binding rule. Periodic update · new data 2026-09-21 #### Stablecoin Regime Japan's stablecoin regime is settled, in force, and actively being extended to foreign issuers under clear equivalence criteria. Domestic yen-pegged electronic-payment-instrument stablecoin issuance is restricted to banks, trust companies, and registered funds-transfer service providers under the Payment Services Act's electronic-payment-instrument framework. A revised FSA Cabinet Office Ordinance recognising foreign trust-type stablecoins as electronic payment instruments took effect 1 June 2026, opening a cross-border equivalence pathway that has already been used: RLUSD cleared this equivalence standard. On the domestic issuance side, JPYSC, issued via SBI Shinsei Trust Bank, gives holders a direct legal claim under trust law to underlying yen held in segregated trust accounts, illustrating the redemption-right structure that trust-bank-issued yen stablecoins carry under this framework. This trust-law redemption structure is distinct from, and generally considered more robust than, a simple contractual redemption promise, since it gives holders a proprietary claim on segregated assets. Stablecoins remain classified separately from the general crypto-asset reclassification occurring under the FIEA amendment, continuing under the Payment Services Act's electronic-payment-instrument treatment rather than moving toward securities-style oversight. #### Outlook Watch for additional foreign stablecoin issuers pursuing the equivalence pathway following RLUSD's approval, and for any divergence in regulatory treatment between domestically-issued trust-bank stablecoins and foreign-equivalence stablecoins as the market develops. Periodic update · new data 2026-09-13 #### Stablecoin Regime Japan's stablecoin regime moved decisively in a liberalising direction this cycle. On 24 August 2026 the FSA removed the JPY 1 million per-transaction cap that had previously constrained second-category funds-transfer stablecoin providers, and simultaneously launched a dedicated Cryptocurrency and Stablecoin Division comprising three specialised offices. This is a probable-confidence, T3-sourced finding and represents the most significant operational liberalisation of Japan's stablecoin framework since JPYC's launch. The underlying legal classification is unaffected by this liberalisation: fiat-referenced stablecoins remain classified under the PSA as electronic payment instruments, confirmed and in force since 2023, issuable only by banks, trust companies, or registered funds-transfer service providers. JPYC, operating under the funds-transfer-service-provider track of that framework, obtained its registration and launched Japan's first FSA-recognised yen-pegged stablecoin in October 2025 — a confirmed, in-force development that predates but sets up this cycle's cap-removal liberalisation. A separate and structurally distinct issuance track is also in motion: JPYSC, a trust-bank-issued yen stablecoin backed by SBI Holdings and Startale Group, is reported to be targeting a launch under the trust-company issuer track, which carries no daily-transaction cap at all, unlike the funds-transfer track JPYC uses. This JPYSC finding is held at Uncertain confidence and T4 source-tier; whether JPYSC has actually completed licensing as of this cycle's cutoff was not independently confirmed. The combination of the funds-transfer-track cap removal and the uncapped trust-company track illustrates that Japan now offers two structurally different regulatory pathways to yen-stablecoin issuance, with materially different transaction-limit profiles, both operating under the same underlying EPI legal classification. #### Outlook Watch for independent confirmation of JPYSC's licensing status under the trust-company issuer track, and for how the newly launched Cryptocurrency and Stablecoin Division's three specialised offices divide supervisory responsibility between the funds-transfer and trust-company stablecoin issuance tracks going forward. Periodic update · new data 2026-08-25 #### Stablecoin Regime Japan's stablecoin framework is the most operationally mature and actively liberalising part of the crypto regime this cycle. Fiat-pegged, par-redeemable stablecoins are regulated as Electronic Payment Instruments under the Payment Services Act, a settled classification distinct from general crypto assets. JPYC Inc. became the first issuer to operate under this framework at scale, obtaining an FSA funds-transfer-service-provider licence in August 2025 and launching Japan's first fully regulated yen-pegged EPI in October 2025 -- giving the regime a live, operating example rather than a purely theoretical structure. Two further developments extend the framework this cycle. First, trust-type EPI issuers may now hold up to 50% of backing reserves in short-term Japanese government bonds of three months or less, or in early-cancellable term deposits, under the amended PSA -- a relaxation from a narrower cash-and-deposit-only composition requirement that gives issuers more yield-bearing flexibility while retaining short-duration, liquid instruments. Second, a Cabinet Office Ordinance effective 1 June 2026 opened a foreign-stablecoin equivalence pathway: qualifying foreign trust-type stablecoins may be recognised as EPIs where their home jurisdiction maintains equivalent regulation and information-sharing arrangements with Japan, opening a route for non-domestic issuers to reach the yen market without building a standalone domestic trust structure from scratch. #### Outlook The stablecoin track looks likely to keep extending rather than tightening. The foreign-equivalence pathway is the mechanism most worth watching going forward, since its use would determine whether the yen stablecoin market remains effectively a single-issuer (JPYC) market or opens to recognised foreign issuers under equivalence arrangements. The reserve-composition relaxation should also be monitored for how it interacts with broader safeguarding and settlement-risk expectations relevant to payments-adjacent oversight, particularly as issuers diversify away from pure cash holdings into short-dated government paper. C4 · Stablecoins & EMTs — Full Module Record 0 sub-modules · 180 words · 8 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### Japan: C5 Consumer ProtectionGreenEnacted in forceModule confidence: Probable▾ Settled statutory/self-regulatory consumer-protection baseline: custody segregation and terms-explanation duties, price-volatility risk disclosure, and JVCEA-supervised advertising/solicitation rules are all in force. FSA is preparing (not yet enacted) a mandatory exchange liability-reserve regime following the 2024 DMM Bitcoin hack, overlapping with the crypto_licensing module's parallel reserve-mandate claim. Open gap — crypto-int-2 Prudential capital and enforcement-penalty sub-topics under consumer_protection/crypto_licensing were not researched this cycle; exact PSA Article 2 segregation pinpoint and insolvency treatment remain unverified. on_chain_activity_regime is a structurally thin-evidence module for Japan Horizon · 2026-Q4 (± six months) FSA liability-reserve mandate legislation Proposed · Tier 4 source #### Consumer Protection Japan's consumer-protection regime for crypto-asset exchange service providers rests on a dual statutory/self-regulatory structure that is settled and enforced. Under the Payment Services Act, exchange service providers must explain terms to users and segregate user assets held by the provider -- a core custody-segregation duty confirmed by FSA guidance dated April 2025. Providers must also disclose to users that crypto-asset prices are not necessarily stable, a risk-disclosure duty confirmed by FSA framework documentation from September 2022. Advertising and solicitation conduct is governed by the Japan Virtual and Crypto assets Exchange Association's 'Rules on Solicitation and Advertisement, etc. Pertaining to the Crypto-Asset Exchange Services,' a self-regulatory rulebook operating under FSA recognition and supervision; the underlying guideline document carries no visible revision date in current sourcing, but the rulebook's authority and in-force status are not in question. The one incremental development this cycle is the FSA's work toward a mandatory liability-reserve regime for exchanges, prompted by the 2024 DMM Bitcoin hack, which would require exchanges to maintain reserves to compensate users for losses arising from hacks or operational failures. This proposal remains at the preparation stage and is not yet enacted; it is the same underlying initiative that surfaces in the crypto_licensing module under the FSA's planned 2026 Diet-session bill, reflecting the initiative's relevance both to exchange conduct obligations and to consumer-facing loss protection. The composed record treats these as two claims describing a shared regulatory initiative from two module perspectives rather than collapsing them into one, consistent with guidance to keep genuinely overlapping claims distinct where their categories and framing differ. #### Outlook Consumer protection is the jurisdiction's most settled module, rated green because its core statutory and self-regulatory obligations are mature, enforced, and unlikely to change materially in the near term. The item to watch is whether the liability-reserve proposal proceeds as a standalone consumer-protection-adjacent measure or is absorbed into the broader FIEA/PSA legislative package that has already reclassified crypto assets -- a resolution that would materially raise the floor of loss protection available to Japanese crypto users following a hack or operational failure. Read full sub-brief · 345 words Periodic update · new data 2026-10-06 #### Consumer Protection Japan's crypto consumer-protection framework rests on two separate pillars: custody segregation under the Payment Services Act (PSA), and market-abuse protection newly extended through the Financial Instruments and Exchange Act (FIEA) amendment enacted 15 July 2026. On custody, registered Crypto-Asset Exchange Service Providers (CAESPs) must hold at least 95% of customer crypto-assets offline in air-gapped cold storage, segregated from corporate assets; up to 5% may be held in hot wallets, provided the operator maintains an equivalent corporate cold-storage reserve to back that hot-wallet balance. This custody-segregation requirement has been in force since 1 May 2020 and is unchanged this cycle. Once the FIEA amendment commences, expected around fiscal year 2027, FIEA insider-trading prohibitions will extend to 'specified crypto-assets' for the first time under statute. This will empower the Securities and Exchange Surveillance Commission (SESC) to investigate, recommend surcharges, and make criminal referrals for crypto insider dealing, powers that previously existed only through Japan Virtual and Crypto assets Exchange Association self-regulation rather than through binding law. This is a material expansion of the statutory consumer and market-integrity protection available to crypto-asset holders and traders in Japan, though it remains enacted and not yet effective. #### Outlook The custody-segregation rule is settled, in-force law and is not expected to change. The market-abuse extension depends on FIEA commencement, expected around fiscal year 2027; until then, crypto-specific insider dealing remains addressed primarily through industry self-regulation rather than statutory enforcement power. Whether a crypto-specific custody liability cap exists in Japanese law, comparable to frameworks seen elsewhere, was not established this cycle. 3 earlier distinct update(s) Periodic update · new data 2026-09-21 #### Consumer Protection Japan's crypto consumer-protection framework is in an emerging phase, with meaningful protective measures in train but several remaining requests or proposals rather than binding law. On 6 August 2026, the FSA and National Police Agency asked the Japan Virtual and Crypto assets Exchange Association to implement eleven fraud-prevention measures, including withdrawal-timing delays and sender/holder name-matching checks. This is a request, not yet binding law, though such informal FSA/NPA requests have historically been folded into binding self-regulatory rules within approximately thirteen months, giving reasonable grounds to expect eventual formalisation. Separately, and more structurally significant if enacted, the FSA plans to submit legislation in the 2026 ordinary Diet session mandating dedicated liability reserves for licensed crypto exchanges, sized by trading volume and incident history. This remains a proposed measure, not yet enacted, and whether it will pass in the 2026 ordinary Diet session as planned is unresolved. The current binding baseline for consumer protection rests primarily on JVCEA self-regulatory rules recognised by the FSA, pending the prospective liability-reserve legislation. #### Outlook Watch for whether the FSA/NPA fraud-prevention requests are formalised into binding JVCEA rules, and whether the liability-reserve legislation is actually introduced and passed in the 2026 ordinary Diet session as currently planned. Periodic update · new data 2026-09-13 #### Consumer Protection Japan's crypto consumer-protection framework tightened this cycle, though with an important confidence caveat on the enforcement-scale element. A mandatory Cybersecurity Self-Assessment (CSSA) proposal for crypto-trading operators, first announced in February 2025, is scheduled for enforcement in FY2026 — a probable-confidence, enacted-but-not-yet-effective development that will require operators to formally assess and document their cybersecurity posture rather than relying on informal or voluntary practice. Separately, six Japanese crypto-asset exchange service providers were reportedly issued FSA Business Improvement Orders amid a broader fraud-prevention supervisory escalation. This finding is held at Uncertain confidence: no FSA primary enforcement-action list was retrieved this cycle to corroborate the specific count of six exchanges, and the claim rests on secondary reporting rather than a primary regulatory source. Readers should treat the six-exchange figure as indicative of an active enforcement escalation rather than as a confirmed, precise count. Taken together, the CSSA proposal and the reported Business Improvement Orders point in the same directional signal — rising supervisory scrutiny of operational and consumer-facing risk management at Japanese crypto exchanges — even though the two findings carry different confidence levels and different degrees of primary-source corroboration. #### Outlook The CSSA's FY2026 enforcement date is the clearer near-term marker to watch, since it rests on a firmer sourcing basis than the Business Improvement Order count. Independent confirmation from an FSA primary enforcement-action list would materially strengthen confidence in the reported six-exchange Business Improvement Order figure, which remains unconfirmed at Uncertain confidence this cycle. Periodic update · new data 2026-08-25 #### Consumer Protection No fresh consumer-protection instrument was identified this cycle, and the existing Payment Services Act custody-segregation and conduct baseline, dating to 2019/2020, is presumed to remain unchanged. The one point of note is contextual rather than regulatory: JPYC's own per-user transaction cap of JPY 1 million per day functions in practice as a de facto exposure limit for users of that particular EPI, though this is an issuer-level operational control rather than a regulator-imposed consumer-protection rule, and no independent regulatory claim supports it as a standing legal requirement this cycle. #### Outlook With no new instrument this cycle, this module should be read as stable rather than newly assessed. Given the scale of change underway in licensing, classification, and stablecoin reserve rules, a consumer-protection instrument addressing how custody and conduct obligations apply once specified crypto assets move to the FIEA track would be a logical next development to watch for. Sources and findings (7) - T1 · Financial Services Agency[Crypto-asset exchange service providers](https://www.fsa.go.jp/en/news/2025/20250410_2/01.pdf) — explain terms to users and segregate user assets held by the provider - T1 · Financial Services Agency[Japan Virtual and Crypto assets Exchange Association (JVCEA)](https://www.fsa.go.jp/common/law/guide/kaisya/e016.pdf) — 'Rules on Solicitation and Advertisement, etc. Pertaining to the Crypto-Asset Exchange Services', supervised by the FSA - T1 · FinancialServices Agency[Crypto-asset exchange service providers](https://www.fsa.go.jp/inter/etc/20220914-2/02.pdf) — crypto-asset prices are not necessarily stable, under advertising/solicitation regulations - T4 · The Block[Financial Services Agency (FSA)](https://www.theblock.co/post/380286/japan-crypto-exchange-reserve-mandate) — liability reserves to compensate users for losses from hacks or operational failures, following the 2024 DMM Bitcoin hack - T3[Payment Services Act Article 2, Japan](https://globallawexperts.com/japan-payment-services-act-2026-guide/) — Crypto-asset exchange services include the purchase, sale, exchange and intermediation of crypto-assets, and the management of users' crypto-assets, making custodial management a licensed activity. - T3[EPIESP licence holders](https://fystack.io/blog/japan-stablecoin-regulation-explained-what-the-2026-rules-mean-for-usdc-usdt-and-yen-stablecoins) — Mandatory client-asset segregation for stablecoin/EPI handling - T3[Financial Services Agency (Japan)](https://www.cobo.com/post/japan-crypto-regulation) — Registered CAESPs must hold at least 95% of customer crypto-assets offline in air-gapped cold storage, segregated from corporate assets; up to 5% may be held in hot wallets provided the operator maintains an equivalent corporate cold-storage reserve to back the hot-wallet balance. ### Japan: C6 Tax TreatmentAmberEnacted in forceModule confidence: Probable▾ Current miscellaneous-income tax treatment of individual crypto profits (progressive rates to 55%, no loss offset/carry-forward) remains in force. July 2026 legislation establishes the basis for a flat ~20% rate with three-year loss carry-forward targeted for January 2028; Challenger hard-flag capped confidence at Probable given sole T4 trade-press sourcing and unconfirmed Cabinet Office implementation timing. Horizon · 2028-01-01 (± a year) Crypto-gains flat 20% tax rate commencement Adopted · Tier 3 source Horizon · 2028 (± more than a year) Proposed flat 20% crypto capital-gains tax rate Proposed · Tier 3 source Horizon · 2028-Q1 (± more than a year) Flat ~20% separate-taxation rate for specified crypto-assets commencement Adopted · Tier 3 source Periodic update · new data 2026-10-06 #### Tax Treatment Crypto-asset gains in Japan are currently taxed as miscellaneous income under the Income Tax Act, subject to Japan's progressive income-tax rates, which can reach up to 55% when combined with local inhabitant tax. This is the current, in-force tax treatment and applies regardless of the pending regulatory reclassification of crypto-assets under the Financial Instruments and Exchange Act (FIEA). A proposed FY tax reform amendment targets a flat 20% separate-taxation rate for gains on specified crypto-assets, aligning the tax treatment more closely with that applied to traditional securities. This proposal is explicitly contingent on completion of the FIEA reclassification, enacted 15 July 2026 but not yet in force, and on the development of implementing tax definitions that follow from that reclassification. Reported targeting points to around 2028 for the new rate, though this is a proposal and not yet enacted tax law. #### Outlook Until the proposed flat-rate reform is enacted, crypto-asset holders in Japan continue to face progressive income-tax treatment on gains, a materially heavier tax burden than the flat rate under discussion. The proposed 2028 timeline for the flat 20% rate tracks the broader FIEA implementation runway, and the two reforms should be read as linked rather than independent developments. Periodic update · new data 2026-09-21 #### Tax Treatment Japan's crypto tax-treatment regime is liberalising on a legislated but delayed timeline. The 2026 tax reform package approves a flat 20 percent tax rate on crypto gains, down from the current progressive rate that reaches up to 55 percent, aligning crypto-gains taxation with securities taxation. The reform also introduces a three-year loss-carryforward provision, a further liberalisation for taxpayers with volatile gains and losses across tax years. The reform is legislated in direction and enacted but does not commence until 2028, meaning the current progressive rate structure, administered by the National Tax Agency, remains in force for the intervening period. This is a case where the enacted-not-yet-effective status is precisely correct: the change is confirmed and enacted, but its effective date sits two years beyond the current tax year. #### Outlook The main item to track is whether any interim guidance or transitional rules are issued by the National Tax Agency ahead of the 2028 commencement date, and whether the flat 20 percent rate structure remains stable as that date approaches. Periodic update · new data 2026-09-13 #### Tax Treatment Japan's crypto tax treatment remains, for now, under its long-standing and comparatively punitive framework: crypto gains are taxed as miscellaneous income at rates reaching up to 55% under the current Income Tax Act, a probable-confidence finding reflecting the regime binding as of this cycle. This rate structure has been a persistent point of industry criticism and a competitive disadvantage relative to jurisdictions offering flat capital-gains treatment for crypto assets. Reform is in motion but not yet binding. On 16 March 2026 the FSA submitted a FIEA amendment to the Diet proposing a flat 20% maximum crypto tax rate with loss-carryforward provisions, tied to reclassifying major cryptocurrencies as regulated financial instruments rather than miscellaneous-income-generating property. This is a probable-confidence, proposed-stage development: it has been submitted but not yet enacted, and the current punitive miscellaneous-income treatment continues to apply in the interim. The proposal's structural logic — linking the tax-rate cut to the same financial-instrument reclassification driving the broader FIEA migration — ties Japan's tax-reform trajectory directly to its licensing and classification reforms rather than treating tax policy as a separate track. #### Outlook The key marker to watch is whether the proposed flat 20% tax rate proceeds to Cabinet-order implementation, and on what timeline relative to the broader FIEA migration's 2026-Q4 ordinance detail. Until implementation, Japan's crypto tax treatment remains at the current up-to-55% miscellaneous-income rate, a material consideration for any assessment of Japan's competitive positioning as a crypto-asset hub. Periodic update · new data 2026-08-25 #### Tax Treatment Japan's crypto tax treatment is the most contested part of the regime this cycle. The settled baseline remains unchanged: crypto-asset gains are classified as miscellaneous income and taxed at progressive rates reaching 55% under current National Tax Agency guidance. Layered on top of that baseline is a genuinely unresolved reform proposal. The FY2026 Tax Reform Outline proposes a flat 20.315% separate-taxation rate for gains on specified crypto assets traded on FSA-registered exchanges, together with a three-year loss-carryforward provision -- a substantial departure from the current progressive miscellaneous-income treatment if adopted as described. However, the proposal's effective date is not settled: one line of reporting places commencement in 2026, while a later CoinDesk account describes a 2028 start instead, and no primary legislative or NTA text confirming either date has been located this cycle. This is a live discrepancy in the evidence base, not a resolved fact, and it should be treated as an open question rather than composed toward either date. #### Outlook The practical stakes of this discrepancy are high: a taxpayer or exchange planning against a 2026 effective date faces a materially different near-term position than one planning against 2028. Resolution will most likely come through publication of the underlying Diet-approved legislative text or direct NTA guidance, and this module should be treated as unsettled until one of those primary sources surfaces. The proposal's linkage to FSA-registered exchanges also ties its eventual scope to the outcome of the FIEA reclassification process, since which assets count as 'specified crypto assets' for tax purposes will likely track the same specified-asset list still pending publication under the licensing track. C6 · Tax Treatment — Full Module Record 0 sub-modules · 180 words · 5 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### Japan: C7 Cross-Border TransferAmberEnacted in forceModule confidence: Probable▾ Travel-rule notification obligation for cross-border cryptoasset/EPI transfers is settled and in force. FSA finalized a 7 July 2026 update expanding the travel-rule equivalent-jurisdiction list by five jurisdictions (selected as top-level lead signal). Standing sanctions-screening directive (2022) and April 2026 FEFTA real-estate reporting extension to crypto-funded transactions by non-residents round out the module. Periodic update · new data 2026-09-21 #### Cross-Border Transfer Japan's crypto travel-rule regime is tightening on an expanding but incomplete reciprocity basis. Effective 3 August 2026, licensed Japanese virtual-asset service providers must complete full travel-rule information collection and notification for transfers involving VASPs in 63 designated jurisdictions, implementing FATF Recommendation 16 obligations. China, Vietnam, and Russia are not yet included in this reciprocity list, meaning transfers involving VASPs in those jurisdictions do not yet carry the same travel-rule notification obligations. Separately, foreign crypto platforms actively targeting Japanese users risk FSA enforcement action if operating without registration; geo-blocking and appointment of a local representative are cited as mitigations available to foreign platforms seeking to avoid this enforcement exposure while still serving, or avoiding service to, the Japanese market. #### Outlook Watch for further expansion of the travel-rule reciprocity list, particularly whether China, Vietnam, or Russia are added, and for any enforcement actions against unregistered foreign platforms actively soliciting Japanese users. Periodic update · new data 2026-09-13 #### Cross-Border Transfer Japan's cross-border crypto-transfer framework was materially refined this cycle. The FSA finalized its amendment to the country/region equivalence designation governing travel-rule scope, effective 3 August 2026 — a confirmed, T1-sourced, in-force development directly from FSA's own publication. Under the finalized regime, Japan limits its travel-rule notification obligation to transfers destined for foreign VASPs located in jurisdictions with regulations equivalent to Japan's own travel-rule requirements, rather than applying notification obligations uniformly to all cross-border transfers regardless of destination-jurisdiction regulatory quality. This equivalence-based approach means the practical compliance burden facing a Japanese VASP or electronic-payment-instrument provider varies materially depending on the destination jurisdiction of a given cross-border transfer: a transfer to a VASP in an FSA-recognised-equivalent jurisdiction carries the standard travel-rule notification obligation, while transfers to non-equivalent jurisdictions may face different or additional scrutiny. This is both a confirmed statutory mechanism and an actively evolving one, since the underlying equivalence list is subject to periodic FSA revision as it assesses foreign regulatory frameworks against Japan's own standard. #### Outlook Watch for further FSA revisions to the country/region equivalence list, since additions or removals directly change the scope of Japan's travel-rule notification obligations for cross-border crypto transfers. This finalized amendment, being both confirmed and T1-sourced, is the most solidly evidenced development in this cycle's crypto coverage for Japan and should be treated as a settled compliance reference point going forward. Periodic update · new data 2026-08-25 #### Cross-Border Transfer Japan's cross-border transfer regime continues to be governed by the Payment Services Act's Travel Rule provisions, which have applied to all crypto transfers without a minimum threshold since June 2023 -- a stricter no-de-minimis posture than several comparable jurisdictions maintain. This cycle's development is an extension rather than a redesign: in May 2026 the FSA published an expanded list of jurisdictions deemed equivalent for cross-border travel-rule notification purposes, broadening the set of counterparties with whom Japanese firms can rely on equivalence-based notification rather than case-by-case verification. The underlying framework itself is mature and was not newly created this cycle; it is being actively extended. #### Outlook The equivalent-jurisdiction list is worth tracking as a leading indicator of Japan's broader cross-border cooperation posture, since further expansions would ease compliance friction for firms transacting with newly recognised jurisdictions, while any narrowing would signal tightening scrutiny of specific counterparty jurisdictions. This mechanism also intersects directly with the stablecoin foreign-equivalence pathway opened the same year, and the two should be read together as a coordinated expansion of Japan's cross-border regulatory-recognition architecture. C7 · Cross-Border & Travel Rule — Full Module Record 0 sub-modules · 180 words · 9 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Amber), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### Japan: C8 AML/CFT RegimeGreenEnacted in forceModule confidence: Probable▾ AML/CFT obligations for JP crypto VASPs are subscribed-surface content owned by the Financial Integrity Module; crypto carries disambiguation context only and performs no independent illicit-finance analysis this cycle. C8 · AML/CFT Regime — Full Module Record 0 sub-modules · 180 words · 1 traced claims · Re-verified 2026-11-04 The decision headline, regulatory posture (Green), primary framework, and supervisory authority above are open on the Free Explore layer. Register free with a business email for 3 full-record passes a month , or unlock all 170 jurisdictions with Pro (£39/mo · £99/mo all products) or Firm (£199/mo · £449/mo all products) . [Unlock with Free Pass / Sign In](https://a-i.gi/auth/login)[View Pro & Firm Plans (£39 / £199)](https://a-i.gi/licensing/#plans)[View Open Exemplar (Gibraltar)](/jurisdictions/gi/) ### Japan: C9 Commercial Activity ▾ ## Commercial Activity SBI Holdings completed its 100% acquisition of crypto exchange Bitbank on 1 October 2026, for consideration reported at JPY46.7 billion, approximately $294.9 million, executed through subsidiary SBICAH GK. The transaction remains subject to Japan Fair Trade Commission merger-control clearance, the outcome of which had not been resolved as at this cycle. This is a well-corroborated transaction, consistently reported across seven independent outlets with matching figures and dates, placing it at the higher-confidence end of this cycle's findings for Japan. The acquisition consolidates a substantial pool of client crypto assets, previously held by an independently-owned regulated exchange, under one of Japan's largest diversified financial groups. From a commercial-activity perspective, this is a notable instance of a large incumbent financial conglomerate acquiring outright an established, already-regulated crypto-asset exchange, rather than entering the market through a new licence application or a minority-stake partnership. It sits alongside, and reinforces, the broader signal of institutional convergence on regulated digital-asset infrastructure in Japan evident in the separately-reported megabank joint stablecoin pilot. No other discrete commercial transaction, funding round, or comparable M&A event meeting this cycle's materiality threshold was identified for Japan's crypto sector. — Outlook: The outstanding Japan Fair Trade Commission clearance decision is the clearest forward milestone attached to this transaction, and its resolution will determine whether the acquisition completes without further conditions. Beyond the clearance decision, subsequent cycles may surface further detail on how SBI Holdings integrates Bitbank's exchange operations, custody arrangements, and compliance functions into the wider group, though no such detail has yet been reported. Periodic update · new data 2026-10-25 #### Commercial Activity SBI Holdings completed its acquisition of 100% of Bitbank on 1 October 2026, for a reported consideration of approximately JPY 46.7 billion (around USD 288.6 million). The deal was first announced on 24-25 June 2026 and its completion was confirmed via multiple corroborating trade-press reports. Bitbank, previously an independently operated Japanese crypto exchange, becomes a wholly owned subsidiary of SBI Holdings as a result of the transaction. The completed deal confirms a transaction that had already been publicly flagged months earlier, and extends a consolidation trend already underway in Japan's crypto-exchange sector, following SBI's earlier acquisition of Bitpoint Japan. The combination creates what available reporting describes as Japan's largest regulated crypto-exchange group by assets under custody, though the precise post-merger custody figures are not sourced within this module's own record. #### Outlook With the transaction closed, the near-term commercial question for this market is whether further consolidation among Japan's remaining independent crypto exchanges follows the same pattern set by SBI's two acquisitions, and how quickly the enlarged group can integrate Bitbank's customer base and custodied assets into its existing operating structure. Sources and findings (3) - T3[SBI Holdings / Bitbank](https://en.cryptonomist.ch/2026/10/01/sbi-acquisition-bitbank/) — SBI Holdings completed 100% acquisition of Bitbank on 1 October 2026 for JPY46.7 billion (~$294.9M), via subsidiary SBICAH GK; subject to Japan Fair Trade Commission merger clearance. - T4[SBI Holdings / Startale Group / SBI Shinsei Trust Bank](https://en.spaziocrypto.com/stablecoins/japan-foreign-stablecoins-yen-on-chain-2026/) — SBI Holdings and Startale Group, via SBI Shinsei Trust Bank, announced JPYSC, a trust-bank-backed yen stablecoin targeting institutional use with no daily cap, originally slated for Q2 2026 launch. - T3[SBI Holdings / Bitbank](https://www.gncrypto.news/news/sbi-completes-bitbank-deal-japan-largest-crypto-exchange/) — SBI Holdings completed acquisition of 100% of Bitbank on 1 October 2026 for approximately JPY 46.7 billion (~USD 288.6 million)