Japan has licensed crypto exchanges longer than any other major market: the Payment Services Act registration regime dates to 2017, tightened after the Coincheck hack with cold-storage and segregation requirements and backed by the JVCEA self-regulatory organization. The 2022 stablecoin amendments, in force since June 2023, restrict issuance of fiat-pegged stablecoins to banks, trust companies, and licensed money transfer agents, making Japan the first G7 country with a dedicated issuer regime; trust-based yen and foreign-currency stablecoins have since launched under it.
The current project is reclassification. The Financial Services Agency has proposed moving crypto assets from the Payment Services Act into the Financial Instruments and Exchange Act, which would treat them as financial products, apply insider trading and market manipulation rules, and open the way to reducing the tax on crypto gains from progressive rates of up to 55% to the flat roughly 20% applied to securities. Legislation implementing the shift has been under preparation through 2026. Leverage caps, listing review, and travel-rule compliance already apply under the existing framework.
The instruments
Payment Services Act: crypto-asset exchange registration
In forceAct No. 59 of 2009, as amended 2016/2019
Crypto-asset exchange service providers must register with the FSA: segregation of customer assets, majority cold storage, listing review, AML program, and annual audit. The 2019 amendments added custody-only services and moved crypto derivatives under the FIEA.
Penalty exposure. Unregistered exchange service is a criminal offence punishable by imprisonment and fines; the FSA issues business improvement and suspension orders.
Stablecoin regime (electronic payment instruments)
In forcePSA amendments, Act No. 61 of 2022, in force June 2023
Fiat-referenced stablecoins are 'electronic payment instruments' issuable only by banks, trust companies, and registered money transfer agents, with redemption at par guaranteed; intermediaries handling them require their own registration.
Penalty exposure. Unlicensed issuance or intermediation carries criminal penalties under the PSA.
Proposed migration of crypto assets to the FIEA
ProposedFSA legislative program, 2025–2026
Would classify crypto assets as financial products under the Financial Instruments and Exchange Act, importing disclosure, insider trading, and market manipulation rules, and enabling the planned move to approximately 20% separate taxation of gains.
Penalty exposure. Not yet law; obligations would attach on enactment.