JPN has been surprisingly friendly to cryptocurrencies, and they are one of the few nations to actively recognize Bitcoin as legal tender, but not specifically a currency. Businesses and consumers are free to transact using digital currencies as they see fit.
However, it does not seem that banks and securities institutions are allowed to deal in Bitcoins due to the particular definition that they have given to cryptocurrencies. Japan cryptocurrency regulation is friendly towards users and investors, and this has caused the popularity of these currencies to rise in recent years. JPN is actually the world's biggest Bitcoin market.
They have however enacted some stricter laws in what cryptocurrencies can be accepted here, and they can be a little confusing. For example, the ruling on anonymous cryptocurrencies such as Monero and Zcash is still up in the air, because the government fears their anonymous nature and the activities associated with them. They have however been loose in permitting more obscure coins like PePecash, which surprised some users.
All in all, JPN's rules seem to be a move to protect consumers more than to limit the usage of cryptocurrencies or obstruct their growth. Whether or not these regulations actually provide the value that they think they do is yet to be seen, but the future of crypto in JPN looks bright.