Blockchain & Cryptocurrency Regulation 2024 (Japan Chapter)

Regulatory framework and definition

General overview

In Japan, there is no omnibus regulation governing blockchain-based tokens. The legal status of tokens under Japanese law is determined based on their functions and uses.

For example, cryptocurrencies and utility tokens such as BTC, ETH, etc. are regulated as "Crypto Assets" under the Payment Services Act (the "PSA"). Business operators who engage in the business of buying, selling or exchanging Crypto Assets (as well as in the intermediation of such activities), or in the management of Crypto Assets for the benefit of others, are required to undergo registration as a provider of Crypto Asset Exchange Services ("CAES" and a provider of CAES, a "CAESP"). Currency denominated stablecoins such as USDC and USDT are regulated as "Electronic Payment Instruments" ("EPIs") under the PSA. Business operators who engage in the business of buying, selling or exchanging EPIs (as well as in the intermediation of