Buying cryptocurrency is legal in Japan. The law defines digital currencies as “crypto assets,” which can be used as a means of payment in transactions with unspecified persons and can be exchanged with fiat currencies such as the Japanese Yen and United States Dollars.
That legal status is well established: crypto is fully legal and regulated under the Payment Services Act, with the FSA licensing all exchanges that serve Japanese residents, as Ledger’s country guide to Japan confirms.
How Japan regulates cryptocurrency
The rules that govern businesses which purchase or sell cryptocurrencies, intermediate those trades, or provide exchange services for them — collectively called “Virtual Currency Exchange Services” — were introduced through an amendment to the Payment Services Act (PSA) in 2016. Japan then passed the Payment Services Act in April 2017, which recognized Bitcoin as property.
Cryptocurrency exchange regulation in Japan is progressive, according to ComplyAdvantage: exchanges are legal in the country, although the market has seen a series of high profile hacks.
The framework is still evolving. Japan plans to transition the regulation of crypto assets from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA), as Baker McKenzie reports.
There is no omnibus regulation governing blockchain-based tokens in Japan. Instead, the legal status of a token is determined by its functions and uses. Cryptocurrencies and utility tokens such as BTC and ETH are regulated as “Crypto Assets” under the PSA.
Is cryptocurrency legal tender in Japan?
Japan recognizes Bitcoin and other digital currencies as legal property under the Payment Services Act (PSA). The country has a progressive regulatory climate for cryptocurrencies.
Which cryptocurrencies are available in Japan?
The green list features some of the most-traded cryptocurrencies in Japan, including Bitcoin (BTC), Ether (ETH), Ripple (XRP) and Litecoin (LTC). In 2020, it was reported that Japan ranked second in trading volume in Bitcoin after the US.
Is crypto taxed in Japan?
Yes. Japan considers crypto earnings over JPY200,000 to be “miscellaneous income,” which means they can be taxed at rates up to 55%. This includes permanent residents’ profits from cryptocurrency trading, bitcoin mining, and DeFi lending.
Does Japan ban any cryptocurrencies?
Japan does not ban cryptocurrency as a whole. However, according to CoinDesk, the FSA announced an outright ban on all cryptocurrencies that provide a sufficient degree of anonymity.
Which exchanges can you use in Japan?
Internationally, Binance, Kraken and PayBis are avenues that can be accessed from Japan. KuCoin is different: out of respect for Japanese legislation requirements, KuCoin rejects all KYC verification requests sent from Japan and has removed Japanese language from its website.
To open a Coinbase account, you need to be a Japanese citizen resident in Japan over 20 years old, and you need identity verification documents.
How do I sell or swap crypto in Japan?
If you want to exchange your Bitcoin for another cryptocurrency in Japan, the process looks like this:
- Register on an exchange that lists BTC.
- Deposit BTC into your account.
- Sell BTC.
- Transfer your new cryptocurrency into a secure wallet.
Which wallet is best in Japan?
Popular wallet options cover every device type:
- Mobile: Coinbase is an easy iOS & Android crypto and NFT wallet.
- Hardware: Ledger Nano X is a secure hardware wallet that connects to your computer via USB.
- Desktop: Electrum is a popular desktop Bitcoin wallet which is compatible with Windows, Mac, and Linux.
Are there Bitcoin ATMs in Japan?
Yes. In Japan, there are Bitcoin ATMs in restaurants in Roppongi, Shibuya, Ginza, and more. BitFlyer has a demo machine.
The bottom line
Buying, holding, and trading crypto is legal in Japan. Exchanges operate legally under FSA licensing, and earnings over JPY200,000 fall under the “miscellaneous income” tax rules. Choose an exchange that accepts customers in Japan, have your identity verification documents ready, and move your coins into a secure wallet once you have bought them.
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