Is crypto legal in Japan, and how is it regulated?

Crypto is legal in Japan, and crypto regulation in Japan is among the most detailed in the world. Exchanges must register with the Financial Services Agency (FSA), and a 2026 law is moving crypto into the same legal framework that covers stocks and other investments.

Is crypto legal in Japan?

Yes. Japanese residents can buy, hold and sell crypto. What is regulated is the business of handling it for customers. Until now that has been done under the Payment Services Act, which treats crypto as a means of settlement.

Firms that exchange or hold crypto for customers must be registered. As of September 1, 2026, the FSA's public list showed 27 registered crypto-asset exchange service providers. The list includes bitFlyer, Coincheck, bitbank and Binance Japan. That list shows which platforms may serve people in Japan.

Registered firms already face strict custody rules. In principle, customers' coins must be kept in offline "cold" wallets, according to the FSA. The guide to hot and cold wallets explains the difference.

What is Japan's crypto regulation reform?

An FSA working group published a report in early 2026 recommending that crypto move to the Financial Instruments and Exchange Act (FIEA). The Cabinet approved a bill on April 10, 2026, and the upper house of parliament passed it on July 15, 2026.

The main changes in the new law and the plans behind it are:

• Investment status. Crypto becomes a financial instrument, though legally distinct from securities.
• Insider trading ban. Trading crypto on undisclosed inside information becomes illegal, modeled on the rules for listed shares.
• Disclosure. Issuers and exchanges must publish information on a token's features, supply, technology and risks, both at listing and on an ongoing basis.
• Tougher penalties. For running an unregistered crypto business, the maximum prison term rises from 3 to 10 years and the maximum fine from 3 million yen to 10 million yen.

Registered firms will be called "crypto asset trading businesses" instead of exchange businesses, FOW reported. Stablecoins and NFTs stay outside the crypto-asset definition, according to the FSA report.

When do the new crypto laws in Japan take effect?

The core provisions start on a date the Cabinet sets by order, within one year of promulgation, according to CryptoSlate. FOW reported that implementation was expected in fiscal year 2027. As of October 2026, the Payment Services Act framework still applies day to day.

Tax is a separate track. A 2026 tax amendment provides a combined 20% rate on gains from eligible tokens sold through registered businesses, but it stays dormant until the FIEA rules are in force. If those rules begin in 2027, the 20% rate would apply from January 1, 2028. Until then, gains are taxed under the existing rules.

The law also opens a path to crypto investment trusts and ETFs, but each product still needs separate approval. For how Japan compares with other countries, see crypto regulation around the world and is cryptocurrency legal.

Rules differ by country and change often. Check the regulator's website or a qualified professional for your own situation.