Japan Payment Services Act: Crypto Registration, Custody and 2026 Reform

Japan has one of the longest-running crypto exchange registration systems among major financial markets, but its regulatory structure is changing again in 2026.

The Payment Services Act (PSA) remains the current foundation for cryptoasset exchange registration, custody and customer-asset protection. Amendments adopted in 2025 took effect on June 1, 2026, introducing a new intermediary category and additional measures affecting customer assets and stablecoin-related services.

A second reform followed only weeks later.

On July 15, 2026, Japan enacted amendments to the Financial Instruments and Exchange Act (FIEA) and Payment Services Act that are designed to move much of the regulation of cryptoasset trading into the FIEA framework.

That later reform has passed, but it has not yet replaced the existing PSA regime as of September 2026.

The Financial Services Agency's implementation materials state that the cryptoasset regulatory changes are scheduled to take effect within one year from April 1, 2027. Until the relevant provisions commence, existing PSA registration and custody rules remain operational.

That creates a two-layer question for users and businesses:

What rules apply to the provider today？

and:

What will change when the 2026 FIEA reform takes effect？

Those questions need to be kept separate.

Japan's crypto framework is broader than the Payment Services Act

The PSA is central, but it is not Japan's entire crypto rulebook.

Different products can fall under different regimes.

At a high level:

This is why the phrase:

“Japan regulates crypto under the PSA”

is incomplete.

The correct analysis depends on the asset, service and transaction.

The current exchange registration regime is still active

Japan has required registration for domestic cryptoasset exchange services since 2017.

The current framework covers activities including:

• buying and selling cryptoassets;
• exchanging one cryptoasset for another;
• intermediary or agency activities connected with those transactions;
• custody and management of customer cryptoassets within the statutory scope.

The FSA maintains an official register of Cryptoasset Exchange Service Providers.

For users, the register is more useful than a platform's claim that it is “licensed in Japan.”

The verification chain should be:

Brand → Japanese legal entity → FSA register → Registered activity → Customer agreement

A global exchange brand can operate through several legal entities.

A Japanese registered subsidiary does not automatically extend its regulatory status to an offshore website or service offered by another group company.

Company incorporation is not exchange registration

A company can be incorporated in Japan without being registered to conduct cryptoasset exchange services.

Likewise, a foreign exchange can have:

• a Japanese office;
• Japanese-language support;
• a Japanese app;
• a local subsidiary;

without that automatically establishing a valid cryptoasset exchange registration.

The customer agreement matters.

Users should identify the actual legal entity providing the service and match that entity with the FSA register.

Japan's customer asset safeguards remain unusually specific

Japan's exchange framework distinguishes customer money from customer cryptoassets.

For customer fiat money, the system uses trust arrangements designed to separate customer money from the exchange's own assets.

For customer cryptoassets, the exchange must segregate customer assets from its own holdings and maintain records that identify customer entitlements.

The FSA and industry materials describe the framework as requiring customer cryptoassets to be kept principally in cold wallets or equivalent offline environments.

Only the amount necessary for normal operations can remain in online hot wallets.

When customer cryptoassets are kept in a hot wallet, the exchange must maintain equivalent cryptoassets of the same type and amount as a performance-assurance resource.

That is a much more specific protection than a generic marketing claim that an exchange “uses cold storage.”

Customer money and cryptoassets are protected differently

The two asset types use different legal mechanisms.

Customer money

Customer fiat money is generally protected through trust arrangements with trust companies or equivalent structures.

Customer cryptoassets

Customer cryptoassets are segregated from the provider's proprietary assets, with the general expectation that most are held offline.

For assets held online for operational reasons, additional same-type and same-quantity holdings are required as a compensating safeguard.

These arrangements are designed to make customer property easier to identify and return if the provider experiences financial or operational problems.

They do not guarantee the market value of the cryptoasset.

A Bitcoin balance can be properly segregated and still lose 50% of its market value.

Custody itself can require registration

Japan's framework does not regulate only exchanges that execute trades.

A business that manages another person's cryptoassets in a way that allows it to transfer the assets without the customer's direct involvement can fall within the cryptoasset exchange service regime even if it is primarily a custodian.

This means the regulatory question is not simply:

Does the company operate an exchange？

It can also be:

Who controls the private keys and can move customer assets？

A wallet technology provider and a regulated custodian can therefore have very different legal positions.

The June 1, 2026 intermediary regime is already in force

One of the most important current changes came into effect on June 1, 2026.

Japan created a new registration category for:

Electronic Payment Instrument and Cryptoasset Service Intermediary Businesses

The framework allows a registered intermediary, acting on behalf of an affiliated licensed provider, to conduct specified intermediation relating to:

• buying or selling electronic payment instruments;
• exchange between electronic payment instruments;
• buying or selling cryptoassets;
• exchange between cryptoassets.

This creates a regulated middle layer between the customer and the full exchange or electronic-payment-instrument provider.

An intermediary is not the same thing as a full exchange

The new intermediary category should not be interpreted as a lighter version of an unrestricted exchange licence.

The role is narrower.

The FSA's framework is based on the intermediary acting on behalf of an affiliated provider.

For cryptoasset services, the intermediary activity focuses on intermediation of transactions.

The intermediary is not intended to take customer deposits of money or cryptoassets under the same model as a full cryptoasset exchange provider.

This difference matters for customer protection.

A user should be able to identify:

• the intermediary;
• the affiliated cryptoasset exchange provider;
• who executes the trade;
• who holds the assets;
• who handles complaints;
• who bears responsibility for customer loss within the statutory framework.

A polished front-end application may therefore be only one layer of the regulated service.

The affiliated provider remains important

The intermediary model uses an affiliation structure.

FSA materials explain that because intermediaries do not receive customer assets, some financial and AML functions remain centered on the affiliated exchange or electronic-payment-instrument provider.

The underlying registered provider therefore remains critical to the relationship.

For users, the relevant chain can be:

App / intermediary → Affiliated exchange → Custody / execution

rather than:

App = exchange

This is another reason to read the customer agreement rather than judging regulatory status from the interface.

The June 2026 amendments also strengthened domestic asset-retention powers

The 2025 PSA amendments implemented in June 2026 also introduced measures allowing authorities to require specified domestic retention of assets in certain circumstances.

The implementation rules define the assets to which domestic-holding orders can apply for cryptoasset exchange providers and electronic-payment-instrument businesses.

These provisions are designed to strengthen the ability to protect customer assets in situations involving financial deterioration or other risks.

The measure should not be described as a rule that all cryptoassets must always be held only inside Japan.

It is a regulatory power that applies within the conditions set out in the framework.

Stablecoins follow a separate PSA framework

Japan does not regulate qualifying stablecoins simply as ordinary cryptoassets.

Fiat-linked stablecoins that meet the relevant legal definition fall within the Electronic Payment Instruments framework introduced in 2023.

The framework distinguishes:

• issuance;
• intermediation;
• custody or management;
• the underlying payment obligation.

This is important because a token marketed as a stablecoin may represent a different legal claim from Bitcoin or another ordinary cryptoasset.

The useful questions are:

• Who issues the token？
• What legal claim does it represent？
• What backs it？
• Can the holder redeem it？
• Who distributes or intermediates it？
• Which registration covers that service？

The word “stablecoin” does not answer those questions by itself.

Not every stablecoin is legally equivalent

Japan's electronic-payment-instrument rules apply to qualifying structures that meet the statutory definition.

A token can be marketed as “USD stable” without automatically becoming a regulated electronic payment instrument in Japan.

The legal analysis depends on the rights represented by the token and the responsible issuer.

This distinction matters for exchange listings.

A platform offering a foreign stablecoin to Japanese customers needs to consider both:

• the legal status of the token;
• the permissions of the intermediary providing the service.

The 2025 amendments expanded some permissible stablecoin reserve structures

The amendments implemented in June 2026 also changed rules affecting specified trust beneficiary interests used in stablecoin structures.

The new framework permits certain backing assets beyond ordinary demand deposits, subject to conditions.

These can include specified government securities and time deposits that permit early cancellation, within regulatory limits designed to protect principal and liquidity.

The policy goal is to give stablecoin structures more operational flexibility without removing reserve-quality requirements.

For users, the practical lesson remains:

Backing quality matters as much as the headline reserve value.

The July 2026 reform is a separate and much larger change

Japan's second major crypto reform of 2026 was enacted on July 15, 2026.

The law amends both the Financial Instruments and Exchange Act and the Payment Services Act.

For cryptoassets, the FSA describes the reform as moving the regulatory framework for cryptoasset transactions into the FIEA while treating cryptoassets as a category of financial product distinct from conventional securities.

This is a significant policy change.

It is not merely an amendment to exchange registration forms.

The reform is designed to reshape:

• cryptoasset trading regulation;
• investor protection;
• disclosure;
• market conduct;
• insider trading;
• intermediary regulation.

But as of September 2026, that future framework has not yet fully commenced.

The FIEA reform is enacted but not yet the current exchange regime

This point is essential.

The legislative record confirms that the reform passed on July 15, 2026.

The FSA's implementation schedule separately states that the cryptoasset regulatory changes are to take effect:

within one year from April 1, 2027

That means the correct September 2026 status is:

Law passed, implementation pending.

It would be inaccurate to write:

“Japan now regulates all spot crypto exchanges under the FIEA.”

The current PSA registration and custody framework remains relevant until the new provisions take effect and the transition is implemented.

What the FIEA reform is designed to change

The FSA's reform materials describe a new structure where cryptoasset trading regulation moves closer to Japan's broader investment and market-conduct framework.

The reform addresses areas including:

• information disclosure;
• rules for cryptoasset businesses;
• unfair trading;
• insider trading;
• regulation of intermediaries;
• investor protection.

This reflects a shift in regulatory perspective.

Cryptoassets are increasingly treated not only as payment-like digital value but also as investment products used by retail and institutional investors.

That does not mean they become ordinary securities.

The FSA expressly describes cryptoassets as financial products distinct from securities.

Moving to the FIEA does not automatically make every cryptoasset a security

This is one of the easiest misconceptions.

If cryptoasset trading moves into the FIEA framework, that does not mean Bitcoin suddenly becomes a share or bond.

The reform can bring cryptoasset transactions within an investment-regulation framework without legally classifying each cryptoasset as a traditional security.

The distinction matters for:

• issuance;
• disclosure;
• trading;
• market conduct;
• derivatives;
• taxation.

The correct statement is:

Japan is moving cryptoasset trading into a broader financial-instruments regulatory framework.

Not:

Japan has declared all cryptoassets securities.

Market conduct and insider trading are becoming more important

The reform also responds to concerns that the existing crypto framework has less-developed rules around market misconduct than traditional securities markets.

The new structure includes provisions aimed at:

• unfair trading;
• insider dealing;
• disclosure of material information;
• market transparency.

This is a major shift for exchanges and token issuers.

A platform's obligations increasingly extend beyond:

• customer custody;
• registration;
• AML.

The integrity of the trading market itself becomes part of the regulatory framework.

The reform does not automatically change taxes today

Crypto tax policy has been widely discussed alongside the FIEA reform.

Japan's fiscal policy materials for 2026 contemplate changing the taxation of certain qualifying cryptoasset transactions from comprehensive income taxation toward a separate 20% taxation framework, subject to the necessary legal and regulatory changes.

The same policy materials also discuss allowing certain cryptoasset ETFs, subject to amendments to the relevant investment-fund rules.

But those policy directions should not be confused with rights already available to users on the date of this article.

The FIEA reform's passage does not by itself mean:

• every crypto investor already receives 20% separate taxation;
• every loss already qualifies for three-year carryforward;
• domestic spot crypto ETFs are already available.

Each measure needs its own effective legal basis and commencement.

Crypto ETF discussion also needs careful timing

The FSA has considered how cryptoasset ETFs could fit within Japan's investment framework.

As recently as late 2025, the FSA stated that domestic formation and sale of cryptoasset ETFs was not permitted under the existing framework.

The 2026 tax and legal reform direction contemplates changing that position.

But a policy commitment to enable ETFs is not the same as an ETF already being approved for sale.

For an investor, the correct questions are:

• Has the necessary investment-fund rule changed？
• Has a specific ETF been approved？
• Is the product available through a licensed distributor？
• What tax treatment is effective on the transaction date？

Do not infer product availability from legislative intent alone.

The PSA will still matter after the FIEA reform

Even after the new cryptoasset trading framework becomes effective, the PSA does not simply disappear from Japanese digital-asset regulation.

The 2026 reform outline continues to place qualifying stablecoins and electronic-payment instruments on the PSA side.

Payment-related activity and investment-market regulation therefore remain separate.

Japan's future framework can be understood roughly as:

Cryptoasset investment and trading regulation → FIEA

Electronic payment instruments / qualifying stablecoins → PSA

This makes asset classification even more important.

A cryptoasset, stablecoin and security token can all use blockchain infrastructure while falling under different rules.

Crypto derivatives are already a separate FIEA issue

Even under the current framework, cryptoasset derivatives have been regulated under the FIEA.

This is another reason the July reform should not be described as the first time the FIEA has applied to crypto.

Leveraged crypto derivatives already involve financial-instruments regulation.

The new reform expands the investment-market framework to broader cryptoasset trading.

For an exchange offering both:

• spot BTC/JPY;
• leveraged BTC derivatives;

the two products can already sit under different regulatory rules today.

Security tokens remain different again

Security tokens representing rights such as shares, bonds or other securities do not become ordinary cryptoassets merely because they use distributed-ledger technology.

They remain subject to the relevant securities framework.

For users, the correct question is not:

Is this token on a blockchain？

It is:

What legal right does the token represent？

A tokenized bond remains economically and legally different from Bitcoin.

A token representing equity rights remains different from a payment stablecoin.

Technology does not erase the underlying asset classification.

Japan's exchange register remains the practical starting point in 2026

Until the new FIEA framework commences, the existing FSA cryptoasset exchange register remains one of the most important practical checks for users.

For a Japanese-facing service:

• Identify the legal company.
• Search the FSA register.
• Compare the registered website.
• Confirm the service being used belongs to that entity.
• Read the customer agreement.
• Check separate terms for custody, staking, lending or derivatives.

The presence of a brand in Japan does not mean every global product under that brand is offered by the registered Japanese company.

The asset list matters in Japan

Japanese registered exchanges generally cannot simply list every token available globally.

Token listings operate within a domestic framework involving regulatory and self-regulatory processes.

That is why the asset selection on a Japanese exchange can be narrower than on an offshore exchange using the same brand.

A token available on a global platform should not automatically be assumed available through its Japanese affiliate.

Likewise, a futures or yield product offered globally may not be permitted through the Japanese entity.

This is another reason to verify at product level.

Customer crypto should be distinguished from lending or yield products

Japan's custody protections are strongest when the asset remains within the regulated custody arrangement.

A customer can change the legal and economic relationship by entering another product.

For example:

• lending;
• yield;
• staking;
• another asset-use arrangement.

The user should ask:

• Does title transfer？
• Can the provider use the asset？
• Is a third party involved？
• Can the customer withdraw immediately？
• Does the normal segregation framework still apply in the same way？

A balance shown inside the same app can represent a materially different contract after the customer opts into another product.

Exchange security and market risk remain separate

Japan's custody framework is designed to reduce risks such as exchange insolvency and hacking.

It does not eliminate:

• token-price volatility;
• blockchain failures;
• user mistakes;
• scams;
• incorrect transfers.

A registered exchange can safeguard one BTC correctly while the market value of that BTC falls sharply.

Regulation of the custodian and economic risk of the asset need to be evaluated separately.

Cold storage does not make an exchange impossible to hack

Japan's requirement to keep customer assets principally offline materially reduces exposure to certain online wallet attacks.

It does not make a platform immune from every security incident.

Risk can still arise through:

• internal systems;
• credentials;
• software vulnerabilities;
• social engineering;
• operational failures;
• third-party providers.

The purpose of regulation is to require stronger controls and clearer loss-absorption mechanisms.

It is not a promise that an incident can never occur.

Travel Rule and AML requirements remain part of exchange use

Japanese cryptoasset exchange providers are subject to AML/CFT requirements.

These include customer verification and transaction-monitoring obligations.

Transfers between regulated providers can also involve Travel Rule information.

For users, that means a crypto withdrawal may involve more than entering a blockchain address.

The exchange may need information about:

• the receiving service;
• the beneficiary;
• the transaction.

Compliance friction should not automatically be interpreted as a custody problem.

The relevant question is whether the request follows the provider's legitimate regulated process.

A seed phrase is never normal KYC documentation

A provider may request:

• identity documents;
• wallet-ownership evidence;
• source-of-funds information;
• transaction explanations.

That does not mean the provider needs the customer's seed phrase or private key.

Those credentials control the assets themselves.

They should not be disclosed as ordinary identity evidence.

Any party requesting a seed phrase to “verify” a wallet should be treated as a serious security risk.

How to evaluate a Japanese crypto provider in 2026

A useful provider review follows several steps.

1. Identify the legal entity

Check the Terms of Service and account agreement.

Use the full Japanese legal company name where possible.

2. Search the FSA register

Confirm the entity appears on the official Cryptoasset Exchange Service Provider list.

Match:

• legal name;
• registration number;
• website.

3. Identify the product

Determine whether the customer is using:

• spot crypto;
• derivatives;
• stablecoin services;
• lending;
• staking;
• a security token.

Do not assume all services fall under the same registration.

4. Check the current law, not only the future reform

For September 2026, the existing PSA regime remains operational.

The July FIEA reform has passed but the main cryptoasset changes have not yet commenced.

5. Check custody terms

Confirm how:

• customer money;
• customer cryptoassets;
• online wallet balances;

are protected.

6. Check whether another entity is involved

An intermediary, custodian or global affiliate may perform part of the service.

Know who actually holds the assets and executes the trade.

7. Save the date of the review

Japan's transition will continue into 2027.

Keep the:

• FSA register date;
• customer agreement version;
• applicable law;
• reform status.

That prevents a 2026 regulatory description from being reused after the new FIEA framework begins.

What businesses should prepare for

Businesses serving Japan need to track both the current and future frameworks.

Current PSA obligations

These can include:

• exchange registration;
• custody rules;
• customer asset segregation;
• AML/CFT;
• Travel Rule compliance;
• customer disclosures.

June 2026 changes

These include:

• the new cryptoasset service intermediary regime;
• electronic-payment-instrument changes;
• asset-retention powers;
• changes to permitted stablecoin-related structures.

Future FIEA changes

Businesses also need to prepare for the later reform involving:

• migration of broader crypto trading regulation;
• market conduct;
• disclosure;
• insider trading;
• new intermediary structures;
• transition from the PSA-based exchange regime.

The implementation plan should not assume the future regime has already replaced the present one.

Japan's regulatory direction is becoming more investment-focused

The policy shift behind the 2026 reform is important.

Japan originally developed its crypto framework heavily around:

• payments;
• exchange registration;
• custody;
• AML.

The new reform reflects the growing role of cryptoassets as investment products.

That brings regulatory attention closer to areas traditionally associated with securities markets:

• investor disclosures;
• unfair trading;
• insider information;
• market integrity;
• investment intermediaries.

This does not erase the payment and stablecoin side of the PSA.

It adds a stronger investment-market framework around crypto trading.

What the reform does not mean

Several conclusions should be avoided.

It does not mean the PSA is already obsolete

The current exchange and custody framework remains relevant until the new provisions commence and the transition is implemented.

It does not mean every cryptoasset is now a security

The reform treats cryptoassets as financial products distinct from securities.

It does not automatically create a 20% tax rate today

Tax changes require their own effective legal provisions.

It does not mean crypto ETFs are already available

Product approval and investment-fund rule changes are separate.

It does not mean every Japanese registered exchange can offer every product

Product scope, entity and regulatory category remain essential.

Conclusion

Japan's crypto framework is in the middle of an unusually important transition.

The Payment Services Act remains the current backbone of spot crypto exchange registration and custody.

On June 1, 2026, amendments introduced the new electronic-payment-instrument and cryptoasset service intermediary regime and other changes to the PSA framework.

Then, on July 15, 2026, Japan enacted a broader FIEA and PSA reform that is designed to move much of cryptoasset trading regulation into the Financial Instruments and Exchange Act.

But the two events should not be merged.

The June PSA amendments are already in force.

The July FIEA reform has passed but its main cryptoasset changes are scheduled to take effect later, within the implementation window beginning after April 1, 2027.

For users, the practical method in September 2026 is therefore:

Check the legal entity.

Check the FSA register.

Check the product.

Check how customer money and cryptoassets are protected.

Separate stablecoins, derivatives and security tokens from ordinary spot crypto.

Do not treat future tax or ETF policy as current law.

Japan's framework is becoming more investment-oriented.

But until the next reform actually commences, the existing PSA registration and custody structure remains central to understanding who can legally serve Japanese crypto customers today.

Frequently asked questions

What law currently regulates crypto exchanges in Japan？

The Payment Services Act remains the current basis for cryptoasset exchange registration and custody in Japan as of September 2026.

The FSA maintains an official register of Cryptoasset Exchange Service Providers.

What changed on June 1, 2026？

Amendments to the Payment Services Act took effect, including the new Electronic Payment Instrument and Cryptoasset Service Intermediary Business regime and additional measures affecting customer assets and stablecoin-related structures.

What is a cryptoasset service intermediary？

It is a newly created registered intermediary category that can mediate specified cryptoasset transactions on behalf of an affiliated registered provider.

It is not the same as a full cryptoasset exchange provider and does not simply receive customer assets under the same model as a full exchange.

Did Japan move crypto regulation to the FIEA in July 2026？

Japan enacted legislation on July 15, 2026 that is designed to move broader cryptoasset trading regulation into the FIEA framework.

However, the main cryptoasset provisions have not yet fully commenced as of September 2026.

When will the FIEA crypto reform take effect？

FSA implementation material states that the cryptoasset regulatory changes are scheduled to take effect within one year from April 1, 2027.

The precise commencement and transition should be checked against the final implementation measures.

Does the reform make Bitcoin a security？

No.

The FSA's reform outline treats cryptoassets as financial products distinct from securities.

Moving crypto trading into the FIEA framework does not turn Bitcoin into a share or bond.

Are crypto derivatives already regulated under the FIEA？

Yes.

Cryptoasset derivatives already fall within the Financial Instruments and Exchange Act framework.

The 2026 reform extends the investment-market approach to broader cryptoasset trading.

Does Japan require exchanges to keep crypto in cold wallets？

Customer cryptoassets are generally required to be managed through offline or equivalent secure methods, with online holdings limited to the amount necessary for operations.

For customer crypto held online, the provider must maintain equivalent assets of the same type and amount as a compensating resource.

Is customer yen held separately from exchange money？

Yes.

The framework requires customer money to be segregated, including through trust arrangements designed to separate it from the exchange's own assets.

Does exchange registration guarantee the value of crypto？

No.

Registration regulates the provider and customer-asset handling.

It does not guarantee the price, liquidity or investment return of BTC, ETH or any other asset.

Are stablecoins regulated the same way as Bitcoin？

No.

Qualifying fiat-linked stablecoins fall under Japan's Electronic Payment Instruments framework under the PSA.

Their issuer, redemption rights and intermediary arrangements need to be analysed separately.

Does the 2026 reform already reduce crypto taxes to 20%？

Not automatically.

Japan's tax-policy materials contemplate a separate 20% taxation framework for qualifying cryptoasset transactions, subject to the required legal and regulatory changes.

The reform should not be treated as proof that the new tax treatment already applies to every 2026 transaction.

Are crypto ETFs already approved in Japan？

Not merely because of the 2026 reform.

Japan has been considering changes that could allow cryptoasset ETFs, but product formation, approval and distribution require separate legal and regulatory steps.

How do I verify a Japanese crypto exchange？

Use this sequence:

Brand → Japanese Legal Entity → FSA Register → Product / Service → Applicable Law → Customer Agreement

Do not assume the regulatory status of a global brand automatically applies to every service offered in Japan.

Official sources

• FSA — Cryptoasset and Electronic Payment Instrument portal
• FSA — June 1, 2026 implementation of the 2025 PSA amendments
• FSA — Electronic Payment Instrument and Cryptoasset Service Intermediary regime
• FSA — Legislative record for the 2026 FIEA/PSA reform
• FSA — Outline of the 2026 financial-market reform
• FSA — Implementation timetable for the 2026 reform
• FSA — Cryptoasset Exchange Service Provider register
• FSA — Cryptoasset framework and custody safeguards
• FSA — 2026 tax reform overview
• FSA — Current Crypto ETF derivatives position

Disclaimer: This article is for regulatory research and informational purposes only. It is not legal, tax or investment advice. Japan's crypto framework is transitioning, so registration status, commencement dates, product availability and tax treatment should be verified against current FSA materials and the applicable customer agreement before use.