Crypto-funded debit card in Japan

Crypto-asset exchange service providers register under PSA Art. 63-2 with capital of at least ¥10 million and non-negative net assets (CAESP Ordinance Art. 9). Cold storage is mandatory except a 5% hot-wallet cap (Art. 27(2)). JVCEA membership is optional if equivalent internal rules are adopted (PSA Art. 63-5(1)(vi)); new tokens need prior notice to the JVCEA.

Custody of crypto-assets for others (PSA Art. 2(15)(iv)) is crypto-asset exchange business requiring Art. 63-2 registration. User money must be entrusted to a trust company (Art. 63-11(1)); user crypto must be segregated and held by the cold method, with hot-wallet holdings capped at 5% (CAESP Ordinance Art. 27), and segregation is audited by a CPA or audit firm (Art. 63-11(3)).

Crypto-asset exchange business requires Payment Services Act Art. 63-2 registration; individual margin must be at least 50% of the position, i.e. 2x maximum leverage (CAESP Ordinance Art. 25(5)(i)). Dealing in or intermediating stablecoins requires registration as an electronic payment instrument exchange service provider (PSA Arts. 2(10), 62-3); the FSA listed 2 as of 27 Aug 2026.

Crypto-asset exchange service providers are specified business operators under the Act on Prevention of Transfer of Criminal Proceeds (Act No. 22 of 2007, Art. 2(2)(xxxii)); they must conduct customer verification (Art. 4), file suspicious transaction reports (Art. 8), and notify originator and beneficiary information to the receiving provider on customer crypto transfers to other providers (Art. 10-5).

Crypto-asset exchange service providers must hold users' crypto-assets separately from their own so each user's holding is immediately identifiable (CAESP Ordinance Art. 27(1)), keep them in cold storage except a hot-wallet portion capped at 5%, and hold their own crypto of the same kind and amount against hot-wallet user crypto (PSA Art. 63-11-2).

Robust Security Measures: Strict requirements for cybersecurity, including multi-signature wallets, penetration testing, and internal audits.

Payment Services Act Art. 2(14) defines crypto-assets as electronically recorded property values usable for payment to unspecified persons and tradeable with unspecified persons, or exchangeable for such values, transferable electronically; fiat, currency-denominated assets, electronic payment instruments and FIEA electronically recorded transferable rights are excluded.

The Payment Services Act (Act No. 59 of 2009) crypto regime of registration, customer verification and asset segregation took effect in April 2017; a 2019 amendment in force May 2020 made changes to handled crypto-assets subject to prior notice, added advertising rules and required user crypto to be held in cold wallets in principle.

The 2022 Payment Services Act amendment (enacted 3 Jun 2022, in force 1 Jun 2023) created electronic payment instruments (Art. 2(5)), issued by banks, trust companies and fund transfer service providers, and a registration regime for EPI exchange service providers (Art. 62-3).

Electronic payment instruments are currency-denominated assets (PSA Arts. 2(5), 2(7)); their exchange and custody are regulated under PSA Chapter III-2 (電子決済手段等), including registration of EPI exchange service providers (Art. 62-3).

A token that is not a currency-denominated asset cannot be an electronic payment instrument under PSA Art. 2(5)(i); if usable for payment to and tradeable with unspecified persons it is a crypto-asset under Art. 2(14), and dealing in it requires crypto-asset exchange service provider registration (Art. 63-2).

Evidence fact jp.tax not found (may have been renamed).

Selling crypto for fiat currency

Regulator: Financial Services Agency (FSA).