Japan is one of the most developed jurisdictions for crypto-asset regulation. Since the amendments to the Payment Services Act came into force in 2017, businesses providing crypto-asset exchange services must be registered as Crypto Asset Exchange Service Providers. The Japanese regime is strict and requires a local structure, robust governance, AML/CFT controls, segregation of customer assets, cybersecurity measures and ongoing regulatory reporting.
General information
| Regulator | Financial Services Agency (FSA) and the relevant Local Finance Bureau |
| License Type | Registration as a Crypto-Asset Exchange Service Provider under the Payment Services Act. Covers crypto exchange, brokerage/intermediation, management of users’ money in relation to exchange services, and custody of crypto-assets for others |
| Minimum Capital | At least JPY 10,000,000 and the applicant must maintain non-negative net assets |
| Time to Obtain | No fixed official timeline. In practice, the process usually takes 6–12+ months, depending on application readiness, business model, systems, and supervisory review |
| Passporting (EU) | No. A Japanese registration does not provide EU passporting rights |
| Local Office | Required. The applicant is generally expected to operate through a Japanese entity with local presence, strong compliance and risk systems, and governance acceptable to the regulator |
Kinds of crypto operations when crypto-currency licenses are required in Japan
According to the legislation in Japan Cryptocurrency exchange licenses are allocated for legal-entities providing the following kinds of usefulness:
- buying, selling, or exchanging cryptocurrencies;
- intermediary, agency, or brokerage activities in this area;
- management of funds, and their storehouse to trades for dealings with crypto-currencies.
Under the Payment Services Act, crypto-assets are generally defined as proprietary value that can be used for payment to unspecified persons and can be purchased or sold to unspecified persons, and can be transferred electronically, or proprietary value that can be mutually exchanged with such assets and transferred electronically.
Who is obliged to obtain a crypto license
Japan VASP license is obligatory for associations, which will work on this market. First of all, it concerns exchanges with transactions in virtual-currencies.
At the same time, banking associations are prohibited from operations with crypto-businesses. However, they can conduct one-time transactions. To obtain a license to conduct such dealings, it is essential to furnish documents confirming that the transaction isn`t systemic and the bank’s technical base is capable of conducting such a transaction.
Also in Japan Cryptocurrency License must obtain from corporations that provide services for its storage. For example, these are the creators of electronic wallets. They need to be officially registered and indicate the kind of their activity to conduct transactions with crypto-currencies. Similarly, providers who have developed their wallets for mediating crypto-trading should do the same.
Prerequisites for a Cryptolicense
Cryptocurrency Regulations in Japan prohibit this business for corporations that are not officially registered. Therefore, to apply for an appropriate assignment, a corporation must:
- have a registered legal entity with an open office in Japan;
- have a minimum funds of 10 mio JPY or more;
- a minimum of one employee in a management position must be a resident;
- the corporation must have a management department and an internal audit department (one employee cannot be trustworthy for both departments at the same time);
- all co-workers must have suitable qualifications and experience in the crypto-business;
- compulsory hiring of a contracted estimation firm to accomplish the financial audit.
If all documents are submitted to the regulator on time, a license will be issued within six months. However, the regulator may also report the need for additional time to review applications in certain cases.
Who will help with obtaining a crypto authorisation in Japan
Under Japanese law, it is essential to submit docs for such licenses in person to representatives of the corporation that is spreading for the permit. Moreover, the regulator’s representatives may ask additional questions at the meeting and often directly influence their decision.
To prepare for such a meeting, it is best to consult with representatives of corporations that have repeatedly helped companies obtain the relevant permits. Our employees are a team of true professionals. Each of us has extensive experience in working with the Japanese regulator. We will not just study all the necessary documentation, but also help to prepare it.
Moreover, we are ready to take care of the rehearsal of the oral interview of your employees. After such a consultation, the probability of conveying the necessary approval increases many times over. Therefore, trust real professionals.
Is crypto regulated in Japan?
Several restrictions in Japan regulate the crypto-currency market. The local FSA acts as the regulator.
Can I trade crypto in Japan?
In case you have a corporation that meets the prerequisites of the local regulator, you can work in this market as a trader without any problems.
