Japan has long been recognized as a pioneer in cryptocurrency adoption and regulation. Below are the key milestones in Japan's crypto regulatory journey:

• May 2016: In response to the Mt. Gox incident, the Japanese Financial Services Agency (FSA) established a regulatory framework for crypto asset service providers under the Payment Services Act (PSA).

• April 2017: The amended Crypto Asset Law came into effect, defining cryptocurrencies under Japanese law. Exchanges were required to register with the FSA, comply with Anti-Money Laundering/Know Your Customer (AML/KYC) standards, and implement strict cybersecurity measures.

• September 2017: The FSA approved 11 exchanges, officially marking the beginning of regulated cryptocurrency trading in Japan.

• January 2018: Cryptocurrency exchange Coincheck suffered a hack resulting in the loss of approximately $530 million worth of NEM tokens at the time, prompting stricter regulations.

• April 2018: In response to tighter regulations, cryptocurrency exchanges jointly established the Japan Virtual Currency Exchange Association (JVCEA).

• October 2018: The FSA granted self-regulatory status to the JVCEA.

• May 2020: The amended Payment Services Act (PSA) and Financial Instruments and Exchange Act (FIEA) came into effect, further clarifying cryptocurrency regulations. Under the FIEA, crypto custody services were introduced, separating custody businesses from exchanges and enhancing investor protection.

• June 2022: Japan’s parliament introduced new regulations allowing licensed financial institutions to issue fiat-backed stablecoins, requiring issuers to fully back stablecoins with yen reserves held domestically.

• April 2023: Japan’s Liberal Democratic Party released a white paper outlining a strategy for Web3 and blockchain adoption, recommending adjustments to tax policies and the approval framework for exchange-traded funds (ETFs).

• June 24, 2025: The Japanese Financial Services Agency (FSA) proposed reclassifying crypto assets as traditional financial products and implementing a new tax regime. The new system is expected to take effect in 2026.

• August 18, 2025: Japanese stablecoin issuer JPYC obtained a "Funds Transfer Service Provider" license in Japan, marking the first time such a license has been granted to a digital currency issuer in the country.

As outlined above, the two major themes in Japan's crypto industry this year are cryptocurrency taxation and yen-backed stablecoins.

On August 25, Japanese Senator Satsuki Katayama noted that Japan is pushing for a reclassification of cryptocurrencies, planning to move them from "miscellaneous income" to the regulatory scope of the Financial Instruments and Exchange Act (FIEA). This would reduce the maximum tax rate from 55% to 20% (aligning with the U.S.), pending multi-party negotiations, with the goal of finalizing the plan by year-end. If the cryptocurrency tax adjustment is implemented, the use of stablecoins in everyday transactions could become more widespread.

Historically, Japan's tax system for cryptocurrency investors has been one of the strictest in the world. Under Japan’s current tax regime, all profits from cryptocurrency transactions are classified as "miscellaneous income." This means that, unlike profits from stocks or real estate, gains from cryptocurrency trading, spending, or earnings are subject to progressive income tax. These rates typically range from 5% for low-income earners to 45% for high-income earners. When combined with the 10% local inhabitants' tax, the effective tax rate can reach as high as 55%, making it one of the highest cryptocurrency tax rates in the world. However, with the passage of the new tax rules, Japanese financial regulators are poised to create one of the most investor-friendly tax structures globally.

The Nikkei previously reported that JPYC is expected to launch a regulated yen-backed stablecoin by October. According to Swift statistics, the yen is the fourth most widely used currency in cross-border payments, and a regulated yen-backed stablecoin could play a significant role in international payments in the future.

JPYC CEO Noritaka Okabe stated at a press conference that the stablecoin will be fully convertible with the yen and backed by domestic deposits and Japanese government bonds (JGBs). The company plans to issue JPYC stablecoins worth 1 trillion yen ($6.81 billion) within three years. If JPYC gains widespread adoption, it could boost demand for Japanese government bonds. "In the future, JPYC is likely to start purchasing Japanese government bonds in large quantities."

Conclusion

SBI’s comprehensive布局 in the crypto space is no coincidence but an inevitable choice for traditional financial giants facing an increasingly mature emerging industry. As traditional financial infrastructure continues to be reshaped and crypto regulatory frameworks improve, actively embracing blockchain technology and the crypto industry is the way to顺应时代潮流. Japan is also ushering in a breakthrough year for crypto: crypto tax reforms will lay the regulatory foundation for global crypto tax frameworks, and the launch of yen-backed stablecoins will promote the practical application of Japanese crypto assets in real-world financial aspects such as cross-border payments.