Stablecoin issuer / redeemer in Japan
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is conditionally permitted in Japan with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- KYC/CDD obligations under the Payment Services Act (PSA) and aligned with FATF recommendations
- Transaction monitoring and suspicious activity reporting (SAR) to FSA/JFSA
- Comprehensive AML/CFT program required by FSA supervision for licensed entities
Key Restrictions
- Stablecoin issuance (EPI stablecoins) restricted to banks, trust companies, and fund transfer service providers — non-financial entities cannot directly issue
- 100% fiat reserve backing required for EPI stablecoins — no fractional reserve or non-fiat collateral permitted
- Redemption at face value must be guaranteed — stablecoin holders have a statutory right to redeem at par
- Stablecoin intermediation (exchange/transfer) requires separate fund transfer service provider registration
- Token must be classified as an 'EPI' (electronic payment instrument) under PSA Chapter III-2; if classified as crypto-asset (no guaranteed redemption), different regulatory framework applies
- Foreign-issued stablecoins used locally must comply with the same PSA Chapter III-2 regime — a locally licensed entity is likely required to intermediary the stablecoin
Key Risks
- Only banks, trust companies, and fund transfer service providers may issue EPI stablecoins — non-financial stablecoin issuers (e.g., standalone fintech) cannot license as such
- Regulatory framework effective June 2023 with refinements through 2024–2025 — some implementation details may still be in flux
- Foreign stablecoin issuers (e.g., Tether, Circle) face structural barriers — no clear 'foreign issuer' license pathway without a locally regulated intermediary
- Up to 55% miscellaneous income tax on crypto gains for individuals; corporate unrealized gains tax treatment adds complexity
- Stablecoin classification line between EPI and crypto-asset depends on redemption guarantee — issuers must ensure structural redemption rights to qualify as EPI
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
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).
Japan's stablecoin regime was enacted by the PSA amendment of 3 Jun 2022 and took effect with its cabinet order, ordinances and supervisory guidelines on 1 Jun 2023; a further PSA amendment enacted 6 Jun 2025 took effect on 1 Jun 2026.
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).
The FSA (with Local Finance Bureaus) registers and supervises crypto-asset exchange service providers (PSA Art. 63-2) and EPI exchange service providers (Art. 62-3), and drafted Law No. 64 of 2026, which moves crypto-asset trading to the FIEA; that law’s crypto provisions are not yet in force.
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.
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.
Evidence fact jp.tax not found (may have been renamed).
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — stablecoin issuance (EPI / fiat-backed with redemption guarantee) is permitted in Japan only by banks, trust companies, or fund transfer service providers under the Stablecoin Law (effective June 2023), requiring a high-burden licensing path with 100% fiat reserves, statutory redemption rights, and FSA supervision; foreign-issued stablecoins require a locally licensed intermediary to operate.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?