After years of unregulated crypto use, Japan became the first economy to formally recognize Bitcoin as a legal payment method through the Payment Services Act (PSA) 2017. As of 2025, Japan has developed one of the most comprehensive and proactive regulatory frameworks for cryptocurrency.
Currently, Japan is actively working on classifying crypto assets as financial instruments, bringing them under stricter financial regulations by 2026.
August 21, 2025 – FSA Tax Reform Proposal
June 25, 2025 – 55th Financial System Council (FSC) Meeting
March 2025- Proposal for Reformation in Crypto Brokerage and Stabecoin Laws
Timeline of Major Crypto Regulations in Japan
Date | Law/ Regulation | Key Provisions |
December 20, 2024 | Crypto Tax Reformation | Shifting from a progressive rate of 55% to a flat 20% tax |
June 1, 2023 | Crypto Travel Rule | Mandatory sender/ receiver info for crypto transfer |
May 1, 2020 | PSA &FIEA Amendments | New AML, cybersecurity, and security token regulation |
June 7, 2019 | AML/ Custody Rules | Stricter KYC, record keeping, and annual compliance report |
April 1, 2017 | PSA Enforcement | Regulating crypto with the Financial Services Agency (FSA) registration |
2016 | PSA and Fund Settlement Law Amendment | Cryptocurrency is recognized as legal tender |
Currently, the government is proactively developing its regulatory framework to enhance security and facilitate the crypto market. Key focuses are:
Is crypto taxed in Japan? Yes, cryptocurrency is taxed as ‘miscellaneous income’ with a progressive income tax rate. There is no capital gains tax enacted yet in Japan.
What falls under miscellaneous income?
On March 6, Japan proposed a crypto tax cut from a progressive rate of up to 55% to a flat 20% on crypto tax gains. However, the bill has not been passed yet to implement the tax reduction. FSA is expected to review this reclassification; if approved, it will likely take effect from 2026.
Tax type | Tax rate | Note |
Income tax | 5% to 45% | Depends on the individual’s total income |
Additional inhabitant tax | 10% | Resulting in 15% to 55% tax rate |
Capital gains tax (CGT) | Not specified yet | Crypto as a financial product |
Reclassification of CGT | 20% for stock profits | Not enacted yet |
Under the Payment Services Act (PSA), the Financial Services Agency (FSA) is the key body regulating mandatory crypto licenses. How to get a crypto license in Japan?
In Japan, the government’s crypto holdings is not publicly known; however, public companies like Metaplanet are known to be one of the biggest crypto holders in Japan. The country has several new proposals in hand that are waiting for review and will likely take effect from 2026. As of 2025, Japan’s regulatory framework has reflected positive results with solid earnings and enhanced protection measures for investors.
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