Japan: A FinTech: Domestic Overview

Japanese FinTech Trends

In Japan, a wide variety of FinTech services have been provided in recent years, as a result of technological innovations such as blockchain. Along with the spread of FinTech services, and in addition to amendments to laws on remittance and payment services, regulations on crypto-assets, security tokens and stablecoins have been introduced, and amendments have been made to laws on Web3. Thus, recent regulations on FinTech services have changed significantly, and FinTech companies need to respond to such changes in a timely manner.

Remittance

When a private company other than a bank or other deposit-taking financial institution provides a remittance service, it is required to register as a Funds Transfer Business Operator under the Payment Services Act (PSA). Previously, with regard to the Funds Transfer Business, there was a limit of JPY1 million per remittance transaction. However, due to the increase in the number of Funds Transfer Business Operators and the diversification of remittance services, the PSA was amended in 2020 to divide the Funds Transfer Business into three categories, and the limit per remittance transaction was abolished for the Type I Funds Transfer Business. However, there are still issues with remittance services over JPY1 million, such as the inability to provide so-called wallet functions, as strict regulations have been established for Type 1 Funds Transfer Business Operators regarding the retention of funds.

In April 2023, amendments to subordinate laws and regulations of the Labour Standards Act enabled digital payroll payments through accounts provided by Funds Transfer Business Operators. As of April 2025, four Funds Transfer Business Operators have been designated as eligible to conduct digital payroll payments.

In June 2025, the amended PSA was enacted. Following this amendment, the relevant Cabinet Orders and Guidelines will be revised accordingly, with the amended PSA scheduled to come into effect in 2026. The main points of the amendment are as follows.

• It will be explicitly clarified that cross-border payment collection agency services (shuno daiko), in principle, fall under funds transfer transactions (kawase-torihiki). However, the following cases are expected to be exempted:
  • where a business operator is involved in the transactions underlying the monetary claims (for example, a platform operator or other entity is involved in concluding the transactions);
  • where a service temporarily holds funds for customers and transfers them after the customers receive the goods (escrow services);
  • where a party has economic unity with the recipient; or
  • where the collection agency service is expected to be provided by a business operator regulated by other laws and regulations.
• A new method of safeguarding user funds will be introduced, under which funds will be directly refunded to users in the event of a funds transfer service provider’s insolvency.
• The strict retention period regulation applicable to Type I Funds Transfer Business Operators as explained above will be moderately relaxed, with fund retention for up to two months expected to be permitted.

Banking as a Service (BaaS)

Banking functions are increasingly being introduced into applications provided by private companies other than banks and other financial institutions. In 2018, the Banking Act was amended to create the Electronic Payment Service, which promoted the opening up of bank Application Programming Interfaces (APIs). In addition, in 2021, the Financial Services Intermediary Business was established as a new type of regulated business that intermediates multiple financial services across banking, securities and insurance with the enactment of the Act on the Provision of Financial Services.

In practice, for example, since the need for a licence may depend on the specifications of the application, this should be taken into account when developing service specifications.

Payment

In recent years, the shift to cashless payments has progressed, and numerous electronic money services and QR code payment services have become available. According to the Ministry of Economy, Trade and Industry (METI), the ratio of cashless payments in Japan, in terms of payment amount, increased from 15.3% in 2013 to 39.3% in 2023.

The type of licence required depends on the details of the payment service. For example, service provider licences include “Issuers of Prepaid Payment Instruments” or “Funds Transfer Business Operators” (electronic money) under the PSA, “Comprehensive Credit Purchase Intermediaries” (credit cards) under the Installment Sales Act, and banks (debit cards) under the Banking Act.

Most recently, the 2022 Amendment to the PSA established regulations for “High-Value Electronically Transferable Prepaid Payment Instruments”. In June 2025, the grace period for this amendment expired. Existing issuers of High-Value Electronically Transferable Prepaid Payment Instruments must have submitted their business implementation plans, and their anti-money laundering (AML) frameworks must have been duly established.

Blockchain

Crypto-assets

In Japan, there are no specific regulations regarding the issuance of crypto-assets, but the 2016 Amendment to the PSA established regulations on the Crypto-Asset Exchange Business from 2017. As a result of the development of the regulatory system, the crypto-asset market has expanded, and the volume of spot transactions in August 2025 was JPY2.7049 trillion in a month. The number of crypto-assets handled has also increased rapidly, and there are currently more than 100 types of crypto-assets that can be handled in Japan.

In May 2024, a Crypto-Asset Exchange Business Operator experienced a leak of JPY48.2 billion worth of crypto-assets, and a business improvement order was issued against the company by the authority. The changes in the regulatory environment for crypto-assets are particularly dramatic and require careful attention.

The 2025 amendment to the PSA introduced a new regulatory framework requiring registration with the Financial Services Agency of Japan (JFSA) for Intermediaries of Electronic Payment Instruments and Crypto-Asset Services. This amendment will take effect in spring 2026.

In April 2025, the JFSA published a discussion paper titled “Examination of the Appropriate Regulatory Framework for Crypto-Assets Related Systems”. Based on this discussion paper, the JFSA is considering changing the regulatory law for crypto-assets from the PSA to the Financial Instruments and Exchange Act (FIEA), and such policy change is now being discussed. The enactment of these amendments is expected in 2026.

Security tokens

As crypto-assets are increasingly being used as a means of raising capital, the 2019 amendment to the FIEA introduced regulations for security tokens from 2020. These regulations include stricter disclosure rules for issuers of security tokens, and stricter financial instruments business regulations for those who handle them.

Since then, the number of cases of security token issuances in Japan has been increasing, especially for investment in real estate. Moreover, there has been increased consideration of bond-type Security Token Offerings (STOs) of late, and it is expected that such STOs will become more active in the future. The development of a trading platform for security tokens, such as the Osaka Digital Exchange (ODX), is also progressing.

Stablecoins

Previously, the application of funds transfer transaction (kawase-torihiki) regulations and prepaid payment instrument regulations was being discussed for stablecoins. However, in light of the increase in the number of stablecoin issuance cases overseas, the PSA was amended in 2022 and stablecoins became regulated as Electronic Payment Instruments from 2023.

In March 2025, SBI VC Trade Co., Ltd. became the first registered Electronic Payment Instruments Service Provider. It will handle only USDC.

In August 2025, JPYC Inc. was registered as a Funds Transfer Business Operator as the issuer of JPYC, the first JPY-denominated stablecoin (Electronic Payment Instrument) in Japan.

NFTs

As the market for blockchain games has expanded, there has also been an increase in the number of NFT issuance cases. In 2023, the JFSA guidelines were revised to clarify certain criteria regarding the applicability of NFTs as crypto-assets under the PSA. As a result, in practice, if the price per minimum trading unit is JPY1,000 or more, or if the quantity issued divided by the minimum trading unit is 1 million or less, it is considered not to fall under the category of Crypto-Assets under the PSA, which is an important criterion for the issuance of NFTs.

In practice, the “Guidelines for NFT Business” published by the Japan Cryptoasset Business Association (JCBA) plays an important role. These guidelines were also revised in August 2024.

There are also two major guidances for gaming-related issues. The JCBA, the Blockchain Collaborative Consortium, the Japan Contents Blockchain Initiative, the Japan Blockchain Association and the Council for Sports Ecosystem Promotion published the “Guidelines on Random-Type Sales of NFTs” in October 2022, while the Computer Entertainment Supplier’s Association, the Japan Online Game Association and the Mobile Content Forum published the amended “Guidelines on Blockchain Games” in July 2024.

The number of so-called Real World Asset (RWA) token issuance cases is also increasing. As part of pilot projects on RWA tokens conducted by METI, the JCBA published the “Guidelines for Utilising RWA Tokens” in March 2025.

FinTech-related policy trends

In Japan, the web3 Project Team (web3PT) was established in 2022 by the ruling Liberal Democratic Party (LDP) and has taken the lead in Web3-related policies in the government. In December 2024, the LDP established a new “web3 Working Group (web3WG)” as a successor to the web3PT. The web3PT/web3WG has published a collection of policy proposals annually.

Since July 2025, the “Working Group on Crypto-Asset Systems” established by the Financial System Council under the JFSA has been examining the appropriate regulatory framework for crypto-assets. Based on the findings of this working group, amendments to the FIEA and the PSA concerning the regulation of crypto-assets are expected in 2026. Therefore, it is crucial to monitor the progress of these discussions closely.

Therefore, in the Japanese FinTech field, since relevant laws and guidelines are established and revised every year, it will be necessary to keep a close watch on such trends in 2026.