Blockchain & Cryptocurrency Laws And Regulations 2025 – Japan

Government attitude and definition

Government attitude

In Japan, regulations for Crypto Asset Exchange Services ("CAES", and CAES providers, "CAESPs") were introduced with the revised Payment Services Act (the "PSA"), which came into effect in 2017. At that time, regulations in respect of CAESPs could be described as minimal from the perspective of user protection, anti-money laundering and counter-terrorist financing ("AML/CFT"). However, due to Crypto Asset (as defined below) leakage incidents in Japan resulting from hacking that targeted CAESPs, as well as revisions to the Financial Action Task Force ("FATF") standards in respect of Crypto Assets, Japanese regulatory authorities have been taking steps to strengthen the regulatory framework surrounding CAESPs. At the same time, measures were also introduced to tighten the taxation regime, resulting in Japan having a more robust tax environment for Crypto Assets as compared to other countries.