Regulation — Japan & the World

A compact view of the essentials, organized by legal stage: current law, enacted, and not yet in force. Every date reflects the position as of August 16, 2026.

The basis and the exceptions for each line are covered in the sections that follow.

Taxes, gain/loss calculation, and filing are covered in the dedicated Bitcoin Taxes topic; this topic focuses on the regulatory framework itself.

Japan was among the first countries in the world to establish a licensing regime for crypto exchanges (the April 2017 Payment Services Act amendment).

Operating a crypto exchange in Japan requires FSA registration as a "Crypto Asset Exchange Service Provider." Operating unregistered is a criminal offense: Article 107 of the Payment Services Act sets a penalty of up to 3 years imprisonment or a fine of up to ¥3 million, and both may be imposed. Once crypto moves under the FIEA the maximum penalty rises to 10 years imprisonment or a ¥10 million fine; that increase already took effect on August 12, 2026.

Major registered exchanges (as of 2026): bitFlyer, Coincheck (Monex Group), GMO Coin, bitbank, SBI VC Trade, Rakuten Wallet, and others (DMM Bitcoin wound down after a 2024 hack; its accounts and assets were transferred to SBI VC Trade).

The Cabinet Office Ordinance and FSA Administrative Guidelines set out detailed operational rules: customer-asset segregation, minimum cold-wallet holdings, hot-wallet limits, AML/CFT frameworks, and more.

After the 2018 Coincheck NEM hack, in which about $530 million was stolen, Japan tightened the rules, requiring at least 95% cold-storage holding among other reforms.

The Payment Services Act amendment passed in June 2022 and took effect in June 2023. Japan was the first G7 country to adopt a comprehensive stablecoin framework.

Electronic Payment Instrument (stablecoin) issuers are restricted to banks, funds-transfer operators, or trust companies, a limit designed to put user protection first.

Issuers must back 100% of the issued value with reserves, and if an issuer fails, users are repaid ahead of other creditors.

Stablecoins and related infrastructure in Japan: JPYC (a yen-denominated stablecoin issued by JPYC Inc., a registered funds-transfer operator, launched October 2025), JPYSC (Japan's first trust-type yen stablecoin, issued by SBI Shinsei Trust Bank, launched June 2026), and USDC (a US-dollar stablecoin issued by Circle; domestic trading began March 2025). Progmat Coin is not a coin brand but a stablecoin issuance/management platform operated by Progmat, Inc. (backed by MUFG Trust Bank and others).

As of June 2026, SBI VC Trade is the only registered electronic payment instruments service provider in Japan. Bridge-style payments along a JPY ↔ USDC ↔ USD path are becoming practical.

The Act Partially Amending the Financial Instruments and Exchange Act and the Payment Services Act, which moves crypto assets out of the Payment Services Act framework and under the FIEA, was enacted on July 15, 2026 and promulgated on July 23. The crypto provisions take effect on a date fixed by cabinet order within one year of promulgation. As of August 16, 2026 no such order has been promulgated; the statutory deadline is July 22, 2027.

The amendment rests on three pillars. First, a disclosure regime requiring issuers and handling operators to disclose information about specified crypto assets. Second, the application of insider-trading rules prohibiting trades on undisclosed material facts. Third, higher penalties for unregistered operation.

Of the three, only the penalty increase took effect early, on August 12, 2026. Operating a crypto asset trading business without registration now carries up to 10 years imprisonment or a ¥10 million fine, up from the Payment Services Act Article 107 level of 3 years or ¥3 million.

The migration is tied to tax. The start date for separate-declaration taxation is defined as January 1 of the year following the year the amended FIEA takes effect, so the timing of the cabinet order also determines when the tax rules switch over (see the Bitcoin Taxes topic for detail).

Separately, the 2026 amendment to the Payment Services Act and related laws took effect on June 1, 2026. One pillar is the creation of the "Electronic Payment Instruments and Crypto Asset Service Intermediary Business" (電子決済手段・暗号資産サービス仲介業), a registration category, distinct from exchange service, for firms that intermediate the services of crypto exchange providers and similar operators. Registration application contents and the disclosure duties owed to users were set out in Cabinet Office ordinances and guidelines promulgated on May 22, 2026.

The other pillar clarifies the scope of domestic asset-holding orders: the specific assets that electronic payment instruments service providers and crypto exchange providers can be ordered to keep within Japan are now defined, strengthening the tool against outflows of user assets overseas.

Based on FATF recommendations, the "Travel Rule" requires crypto exchanges to pass originator and beneficiary information to each other for transactions above a threshold.

Japan began enforcement in June 2023: for transfers over ¥100,000 (~$660), the sending and receiving exchanges must share the name, address, and account details.

Several protocols coexist: TRP (Travel Rule Protocol), Sygna Bridge, and the Coinbase-led TRUST. Interoperability between exchanges remains a work in progress.

Transfers to self-custody wallets (MetaMask and other personal wallets, for example) require the user to submit the recipient address details to the exchange in advance.

The rule is contested on privacy grounds, but it lines up with the emerging international AML standard.

May 2024: FIT21 (Financial Innovation and Technology for the 21st Century Act) passed the U.S. House with bipartisan support (279 to 136).

At its core, FIT21 sorts crypto assets clearly into either "commodity" or "security." Bitcoin falls unambiguously on the commodity side, under CFTC jurisdiction.

The bill clarifies the SEC/CFTC jurisdictional split, moving away from the Gensler-era "regulation by enforcement" approach toward explicit rule-making.

After the 2025 administration change, the successor "CLARITY Act" (H.R.3633) passed the House in July 2025. In the Senate, the Banking Committee approved it 15–9 on May 14, 2026, but as of August 16, 2026 no floor vote has been held.

In parallel, the "GENIUS Act" covering stablecoin regulation passed in 2025, establishing a framework for U.S. dollar-denominated stablecoins.

March 6, 2025: President Trump signed Executive Order 14233, establishing the Strategic Bitcoin Reserve.

Initial assets: roughly 200,000 BTC held by the federal government through criminal forfeiture became the reserve's seed holdings, among the largest such holdings anywhere.

Under a "budget-neutral" policy, further acquisitions should not burden taxpayers; options under consideration include tariff revenue and revaluation of special drawing rights.

A parallel "Digital Asset Stockpile" was also established. Other crypto, ETH among it, sits in that stockpile but is generally subject to sale. Bitcoin alone is held under a protected "no-sale" rule.

Following the federal move, states including Texas, New Hampshire, and Arizona have passed their own Bitcoin reserve laws.

May 2023: the EU Council formally adopted MiCA (Markets in Crypto-Assets Regulation, Regulation (EU) 2023/1114). Application was phased: the stablecoin titles (ARTs and EMTs) applied from June 30, 2024, and the regulation applied in full, including the CASP regime, from December 30, 2024.

MiCA provides a single regulatory framework across all 27 EU member states, removing the inconsistencies that existed between them.

CASP (Crypto-Asset Service Provider) licensing: register in one member state, then passport across the entire EU.

Stablecoin regulation: strict requirements on "significant" non-euro stablecoins such as USDT, which led to USDT delistings on some EU exchanges.

Transparency requirements: a "white paper" filing at issuance, a prohibition on market manipulation, and insider-trading rules, close to a securities-style regime.

UK: for years the only requirements were FCA registration under the money laundering regulations and, from October 2023, the financial promotions regime. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (SI 2026/102), made in 2026, brought nine cryptoasset activities inside the FSMA regulatory perimeter for the first time; full commencement is set for October 25, 2027.

Singapore: MAS licenses DPT (Digital Payment Token) services. The country positions itself as an Asian crypto hub with institution-focused rules.

China: trading and mining have been comprehensively banned since September 2021. Holding BTC as an individual is not itself banned, and courts have recognized BTC as property.

India: a 30% crypto tax from April 2022 plus a 1% TDS (tax deducted at source), which in practice suppresses activity.

South Korea: the 2024 "Virtual Asset User Protection Act" established strict exchange oversight.

Japan: following the FY2026 Tax Reform Outline (Cabinet decision of December 26, 2025), an amended Income Tax Act enacted in March 2026 applies 20.315% separate-declaration taxation only to disposals of "specified crypto assets" made through registered domestic operators, and the FIEA amendment was enacted that July. Disposals outside that bucket remain comprehensively taxed. The start date is January 1 of either 2027 or 2028 and stays unsettled until the cabinet order fixing the FIEA amendment's effective date is promulgated (statutory deadline July 22, 2027). See the Bitcoin Taxes topic for detail.

U.S.: the CLARITY Act is expected to settle the SEC/CFTC jurisdictional split, and state-level Bitcoin reserves are spreading.

Stablecoin competition: contention between sovereign CBDCs and private stablecoins is likely to sharpen.

Travel Rule harmonization: FATF is pushing cross-border protocol compatibility as a priority.

In the long run the focus may shift from "crypto-asset regulation" toward "decentralized financial infrastructure regulation" and the legal responsibilities of protocol developers may move to the center of the debate.