Japan’s Evolving Regulatory Landscape for Cryptocurrency and Blockchain Technology: A Comprehensive Overview

As the world continues to navigate the ever-evolving landscape of cryptocurrency and blockchain technology, a crucial aspect is the regulatory frameworks established by nations. Japan, being one of the pioneers in embracing digital currencies, has consistently demonstrated its commitment to fostering a robust environment for the growth of these innovative sectors.

In 2025, Japan’s stance on cryptocurrency remains steadfastly pro-business-friendly, with ongoing efforts aimed at expanding the scope and reach of its regulatory framework. This article aims to provide an exhaustive overview of the current legal landscape governing crypto activities in Japan.

The Payment Services Act (PSA) was enacted in April 2017, marking a pivotal moment for cryptocurrencies in Japan. The Act’s main focus is on ensuring transparency, security, and investor protection within the space.

Following the PSA’s inception, significant amendments have been made to further refine the regulatory landscape. In May 2020, Japan introduced mandatory crypto licenses for exchanges and platforms seeking to operate in the Japanese market. These entities must register with the Financial Services Agency (FSA) before conducting their activities.

To become eligible, businesses need to establish a local entity, usually a Kabushiki Kaisha joint-stock company, and possess a minimum capital of over ¥10 million. Additionally, having a physical presence in Japan and a Japanese bank account is mandatory. Furthermore, stringent AML and CFT regulations must be adhered to.

Recent developments have seen the government unveil proposals for reclassifying certain digital assets under the Financial Instruments and Exchange Act (FIEA). This potential amendment aims at further strengthening security measures and investor protection.

As the world moves toward a cashless economy, Japan has set an ambitious target of achieving 40% penetration by 2025. The country is actively working on refining its regulatory framework to facilitate growth and increase adoption.

Moreover, public companies like Metaplanet are well-known crypto holders in Japan.

Source: coinpedia.org