Bitcoin in Japan: Legal Status, Tax Rules and the Right to Self-Custody

As of October 16, 2026. This article describes Japanese national law in force on that date and marks what is enacted but not yet in force, or only proposed. Translations from Japanese are mine. Statutes were read in the original on e-Gov Law Search, not in the non-binding official English translations.

Bitcoin is legal to buy, hold, sell and self-custody in Japan. It is a "crypto-asset" under the Payment Services Act, which requires businesses that exchange or hold it for others to register with the Financial Services Agency (FSA), but it is not legal tender. Individual gains are generally taxed as miscellaneous income at progressive rates, and a separate 20% regime has been enacted but does not yet apply.

Yes. No Japanese statute prohibits owning, buying, selling or self-custodying Bitcoin; several regulate the businesses around it.

The core instrument is the Payment Services Act (資金決済に関する法律, Shikin Kessai ni Kansuru Hōritsu), Act No. 59 of Heisei 21 (2009). It calls Bitcoin a crypto-asset (暗号資産, angō shisan). The older statutory term was virtual currency (仮想通貨, kasō tsūka).

Under Article 2(14), item 1 covers property value that can be used to pay unspecified persons for goods or services and can be bought from and sold to unspecified persons. It must be recorded by electronic means and transferable through an electronic data processing system. Japanese currency, foreign currencies, currency-denominated assets and electronic payment instruments are excluded. Bitcoin fits item 1.

No. Bitcoin is not legal tender in Japan.

Article 46(2) of the Bank of Japan Act, Act No. 89 of Heisei 9 (1997), states that Bank of Japan notes "shall circulate as legal tender (法貨, hōka) without limit." The crypto-asset definition in the Payment Services Act expressly excludes Japanese and foreign currency.

The Civil Code defines "things" narrowly, and the published case law I could verify treats Bitcoin held at an exchange as a contractual claim against the exchange.

Article 85 of the Civil Code, Act No. 89 of Meiji 29 (1896), reads: "In this Code, a 'thing' (物, mono) means a tangible object (有体物, yūtaibutsu)."

A 2015 Tokyo District Court ruling in the Mt. Gox matter is often cited on this point, but it is not published on the courts' official site, so I do not rely on it.

In a Tokyo District Court judgment of April 27, 2022 (Reiwa 4), users sued an exchange after another crypto-asset was sent out of its addresses without authorization. Under the user agreement, the court found, the exchange had a duty to transfer coins to the address a user designated, and it ordered those transfers.

In practice: sats left on an exchange are, in the published cases, a contractual claim.

No provision I reviewed requires an individual to register in order to buy, hold or self-custody Bitcoin for themselves. Registration attaches to businesses serving others.

Article 63-2 of the Payment Services Act reads: "No person may carry on crypto-asset exchange business unless registered by the Prime Minister." Article 2(15) defines crypto-asset exchange business (暗号資産交換業, angō shisan kōkan gyō) as carrying out any of four acts as a business:

The last item means custodial services need registration. Buying sats for your own account or keeping your own keys is not on the list. The FSA publishes the register and its warnings to unregistered operators.

Registered exchanges must segregate customer assets, keep most customer coins offline and follow advertising rules.

Article 63-11 of the Payment Services Act requires segregated management (分別管理, bunbetsu kanri). Customer money must be kept separate and entrusted to a trust company. Customer crypto-assets must be kept separate from the operator's own.

The detail sits in the Cabinet Office Ordinance on Crypto-Asset Exchange Service Providers, Cabinet Office Ordinance No. 7 of Heisei 29 (2017). Article 27(3) describes keeping the information needed to move customers' coins on devices "not constantly connected to the internet." Under Article 27(2), coins held otherwise may not exceed 5% of the yen value of customer crypto-assets.

Article 63-9-2 requires every advertisement to show the operator's name and registration number and to state that crypto-assets "are not Japanese currency or foreign currency." Article 63-9-3 item 3 prohibits any display that encourages buying or exchanging crypto-assets "solely for the purpose of profit, rather than for use as a means of payment."

Article 87 lets the Prime Minister certify an association formed by operators as a certified payment service providers association (認定資金決済事業者協会, nintei shikin kessai jigyōsha kyōkai). The FSA announced on October 24, 2018(Heisei 30) the certification of the association then named 日本仮想通貨交換業協会. In 2026 FSA documents it appears as 一般社団法人日本暗号資産等取引業協会 (Nihon Angō Shisan-tō Torihikigyō Kyōkai).

Japan has enacted a law moving crypto-asset trading under the Financial Instruments and Exchange Act, but its main provisions are not yet in force.

A Financial Services Council working group reported on December 10, 2025 (Reiwa 7). According to the House of Representatives record, it was received on April 10, 2026, passed the House on June 11, 2026, passed the House of Councillors on July 15, 2026, and was promulgated on July 23, 2026 as Act No. 64 of Reiwa 8 (2026).

The bill outline states that the act takes effect, in principle, on a date set by cabinet order within one year of promulgation. Provisions raising penalties for unregistered business take effect 20 days after promulgation, which the FSA gave as August 12, 2026. I found no cabinet order fixing the main effective date on the FSA site.

The FSA's explanatory material lists the main changes once in force:

In practice: Bitcoin has no issuer, so the disclosure duty would fall on exchanges, not holders.

Gains from Bitcoin are in principle miscellaneous income (雑所得, zatsu shotoku), added to other income and taxed at progressive rates.

Question 2-2 of the National Tax Agency (NTA) FAQ dated December 26, 2025 (Reiwa 7) states that gains from crypto-asset transactions are "in principle classified as miscellaneous income." Where annual receipts from crypto-asset transactions exceed 3 million yen, they are in principle business income (事業所得, jigyō shotoku) if books are kept, and business-related miscellaneous income if not.

Article 89(1) of the Income Tax Act, Act No. 33 of Showa 40 (1965), sets these national rates on taxable total income:

Article 13 of the Act on Special Measures for Securing Reconstruction Funding after the Great East Japan Earthquake, Act No. 117 of Heisei 23 (2011), adds a special income tax of 2.1% of the base income tax, for the years 2013 to 2037 under Article 9.

Inhabitant tax (住民税, jūminzei) is a local tax. The Local Tax Act sets the standard income-based rate at 4% for the prefecture (Article 35) and 6% for the municipality (Article 314-3), shifting to 2% and 8% in designated cities.

The NTA FAQ addresses these events:

Only within the same category. NTA Q2-11 states that losses in computing miscellaneous income cannot be offset against salary or other income. Article 69(1) of the Income Tax Act does not list miscellaneous income among the offsettable categories.

The filing period runs from February 16 to March 15 of the following year under Article 120(1) of the Income Tax Act. Under Article 121(1)(i), a resident paid salary of 20 million yen or less by a single employer, fully withheld or adjusted at year end, need not file if other income for the year is 200,000 yen or less.

No. Article 9(4) of the Order for Enforcement of the Consumption Tax Act lists crypto-assets under Article 2(14) of the Payment Services Act among the means similar to payment instruments, whose transfer is non-taxable under Appended Table 2, item 2 of the Consumption Tax Act.

A separate 20% rate has been enacted, but it will apply only from January 1 of the year after the 2026 market reform takes effect.

The Act Partially Amending the Income Tax Act was promulgated on March 31, 2026 as Act No. 12 of Reiwa 8. Its bill outline taxes transfers of specified crypto-assets (特定暗号資産, tokutei angō shisan) to an exchange operator separately from other income at a national rate of 15%. Specified crypto-assets are those whose names are entered in the financial instruments business register. Losses could be carried forward for three years.

The Cabinet's FY2026 tax reform outline of December 26, 2025 gives the combined rate as 20%, of which 5% is individual inhabitant tax. It states that the regime applies to transfers on or after January 1 of the year following the effective date of the amended Financial Instruments and Exchange Act.

In practice: until that date, progressive rates apply.

Companies must mark Bitcoin to market at year end, subject to exceptions.

NTA Q3-1-3 and Q3-1-4 state that a company must value crypto-assets with an active market at fair value at year end, under Article 61(2) of the Corporation Tax Act. Self-issued crypto-assets held since issuance are excluded. The NTA's FY2024 reform summary lets a company choose cost or fair value for others' crypto-assets under a published transfer restriction, for business years ending on or after April 1, 2024 (Reiwa 6).

Bitcoin is subject to inheritance tax and gift tax and is valued at market value at the time of acquisition.

NTA Q2-10 states that an individual who acquires crypto-assets by inheritance, bequest or gift is subject to inheritance tax or gift tax. Article 22 of the Inheritance Tax Act, Act No. 73 of Showa 25 (1950), values property acquired by inheritance, bequest or gift at its market value (時価, jika) at the time of acquisition.

In practice: heirs cannot move sats they cannot find. A self-custody setup needs a recovery path for heirs.

The travel rule binds exchange operators, not wallets, and applies when Bitcoin moves between operators.

Article 10-5 of the Act on Prevention of Transfer of Criminal Proceeds (犯罪による収益の移転防止に関する法律, Hanzai ni yoru Shūeki no Iten Bōshi ni Kansuru Hōritsu), Act No. 22 of Heisei 19 (2007), applies when an operator transfers crypto-assets to a recipient whose coins are managed by another operator or a foreign operator. The sending operator must notify the receiving operator of the identity details of the sender and recipient set by ministerial ordinance. Foreign operators in jurisdictions designated by cabinet order are excluded.

The FSA stated on May 26, 2023 (Reiwa 5) that the implementing rules take effect on June 1, 2023, including measures operators must take when transacting with unhosted wallets.

On August 6, 2026, the FSA and the National Police Agency asked the association to strengthen anti-fraud measures. These include withdrawal holds after a deposit, pre-registration of withdrawal addresses and withdrawal limits. They are requests, not statutory duties.

In practice: expect checks and delays when withdrawing to a newly added address of your own.

Tax depends on residence status, with a special rule for newer arrivals.

Article 2(1)(iii) of the Income Tax Act defines a resident (居住者, kyojūsha) as an individual with a domicile in Japan or a residence for one year or more. Item (iv) defines a non-permanent resident (非永住者, hi-eijūsha) as a resident without Japanese nationality who had a domicile or residence in Japan for five years or less in total within the past ten years.

Under Article 7(1), residents other than non-permanent residents are taxed on all income. Non-permanent residents are taxed on income other than foreign-source income, plus foreign-source income paid in Japan or remitted from abroad.

Since January 1, 2026, exchanges also apply the Crypto-Asset Reporting Framework. Under the NTA's CARF FAQ, existing users must file a self-certification with their exchange by December 31, 2026, and non-residents' data is reported by April 30 of the following year.

Yes. No statute prohibits owning, buying, selling or self-custodying Bitcoin. Article 2(14) of the Payment Services Act classifies it as a crypto-asset, and Article 63-2 requires businesses that exchange or hold crypto-assets for others to register with the Prime Minister, through the Financial Services Agency. Bitcoin is not legal tender.

No provision I reviewed requires one. Article 2(15) of the Payment Services Act lists four business activities, including managing crypto-assets for others, that require registration under Article 63-2. Buying Bitcoin for your own account or keeping your own keys is not on that list, so no registration attaches to it.

The NTA treats gains as miscellaneous income in principle, taxed with your other income. National rates under Article 89(1) of the Income Tax Act run from 5% to 45%, plus a 2.1% reconstruction surtax on the tax amount. Inhabitant tax adds a standard 10%, split between prefecture and municipality.

Yes. Question 1-3 of the NTA's December 2025 FAQ treats a swap as buying the second crypto-asset with the first, so the gain on the Bitcoin given up is realized. Question 1-2 applies the same logic to paying for goods with Bitcoin. Losses cannot be offset against salary or other income.

Not yet. Act No. 12 of 2026 enacted a separate regime for specified crypto-assets transferred to an exchange. The Cabinet's December 2025 outline sets the rate at 20%, including 5% inhabitant tax, from January 1 of the year after the amended Financial Instruments and Exchange Act takes effect. That date depends on a cabinet order.

The travel rule in Article 10-5 of the Act on Prevention of Transfer of Criminal Proceeds binds exchange operators sending crypto-assets to customers of other operators. It does not bind your wallet. Since June 1, 2023, a separate ordinance requires operators to take verification measures for transactions with unhosted wallets.

Yes. The NTA's December 2025 FAQ states that crypto-assets acquired by inheritance, bequest or gift are subject to inheritance tax or gift tax. Article 22 of the Inheritance Tax Act values inherited or gifted property at its market value at the time of acquisition. Heirs need access to the keys to deal with the coins.

This article is general information and not legal advice.

To see how Japan compares with other countries, open The Bitcoin Act's interactive Global Bitcoin Regulatory Map. It sets legal status, self-custody, tax and seizure risk side by side across jurisdictions: https://thebitcoinact.xyz/bitcoin-legal-map

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