East Asia / Verified 2026-07-14
Is crypto legal in Japan?
Legal
Cryptocurrency is fully legal in Japan, which has run the longest continuously operating licensed-exchange regime in Asia since the 2017 Payment Services Act (PSA) amendment. Only FSA-registered exchanges (bitFlyer, Coincheck, GMO Coin, SBI VC Trade, etc.) may legally serve Japanese residents. A Diet bill to move crypto regulation from the PSA to the Financial Instruments and Exchange Act (FIEA) — reclassifying ~105 tokens as financial instruments — passed the Lower House on June 11, 2026 but is still pending in the Upper House as of this writing, so the reclassification is not yet law.
Tax treatment
Miscellaneous income under current law; the pending reform would carve out a separately-taxed, securities-like class limited to tokens listed on FSA-registered domestic exchanges
Current law taxes crypto gains as 'miscellaneous income' (zatsu shotoku) at progressive national rates of 5-45% plus a flat 10% local inhabitant tax — a combined top marginal rate near 55%, well above the ~20% preferential rate on listed stock gains. A December 2025 tax reform outline and the pending FIEA bill would introduce a flat 20.315% separate self-assessment rate (15% national + 5% local + 2.1% reconstruction surtax on the national portion) for gains on FSA-registered-exchange-listed 'specified crypto assets,' with 3-year loss carryforward — but this is a proposal, not current law. Nagashima Ohno & Tsunematsu (a top-tier Japanese law firm) projects the earliest realistic effective date as January 1, 2028, contingent on Upper House passage and implementing cabinet orders.
Annual final tax return (kakutei shinkoku) required if miscellaneous income exceeds 200,000 yen/year; no employer withholding on crypto gains; every disposal, including crypto-to-crypto trades, is a taxable event under current rules
Can banks handle crypto here?
Licensed exchanges must hold customer fiat in segregated trust accounts at Japanese banks. Banks themselves have been barred from directly dealing in crypto since a 2020 restriction, but the pending FIEA reform would let banks and insurers hold crypto for investment purposes and let bank-group subsidiaries register as exchanges — a reversal still awaiting passage.
Buying and selling crypto in Japan
On-ramp is via FSA-registered domestic exchanges linked to a Japanese bank account held in the account owner's own name. Access to offshore/unregistered exchanges is being actively squeezed — Bybit announced it will end services for Japanese residents in 2026 amid FSA compliance pressure.
Worth knowing
The widely-repeated '55% to 20%' headline is premature as of July 2026 — the bill has cleared only the Lower House. Treat any claim that the 20% flat rate is already in effect as incorrect; current law is still the ~55% miscellaneous-income regime.
Authority sources used
Outbound links are included for verification and entity authority, not decoration. Every claim on this page traces back to one of these.
- Report by the Working Group on Crypto-asset Systems, Financial System CouncilFinancial Services Agency (FSA), Japan
- Finalized amendment expanding Travel Rule jurisdictional scopeFinancial Services Agency (FSA), Japan
- Japan's 2026 Tax Reform on Taxation of Crypto Asset Transactions and Its Implications for Foreign InvestorsNagashima Ohno & Tsunematsu (law firm)
- Japan's Lower House Passes Bill Moving Crypto Under Securities Law, Opening Path to ETFs and 20% Tax RateThe Defiant
FAQ
Is Bitcoin legal in Japan?
Yes. Japan has recognized crypto assets as legal property since 2017 and operates Asia's longest-running licensed exchange regime via the FSA.
Has Japan's crypto tax really dropped to 20%?
Not yet as of July 2026. A bill introducing a flat 20.315% rate passed Japan's Lower House in June 2026 but still needs Upper House passage and implementing rules; current law still taxes most crypto gains as miscellaneous income up to roughly 55%.