Picture this: Japan's cryptocurrency scene is exploding with activity, as investors chase higher returns and exchanges scramble for a bigger slice of the pie, all fueled by whispers of lighter regulations. But here's where it gets controversial—could this enthusiasm lead to another bubble, or is it the smart move in a world of sluggish wage growth? Stick around to explore the buzz and the cautionary tales.
Summary
Cryptocurrency exchanges in Japan are stepping up their game by introducing fresh offerings, as demand from investors skyrockets. Japanese holders of digital assets reached an all-time high in July, and upcoming domestic regulatory tweaks are adding to the momentum. Meanwhile, experts are sounding the alarm on potential dangers, while investors lean toward safer, larger cryptocurrencies over riskier alternatives.
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TOKYO, November 5 (Reuters) – From unveiling innovative features to enabling trades with borrowed funds, crypto platforms and select financial institutions in Japan are eagerly seizing the opportunity presented by growing public interest in digital currencies, driven by optimism about regulatory reforms.
This uptick reflects a shift toward bolder investment choices in Japan, where rising prices are outpacing salary increases and overshadowing past hesitations stemming from major security lapses at exchanges back in 2014 and 2018.
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Japanese investors' holdings in cryptocurrencies climbed to a historic peak of 5 trillion yen (equivalent to about $33.16 billion) by July's end, marking a 25% rise from the previous month. Interestingly, bitcoin—the leading cryptocurrency—saw a more modest 15% increase in value during the same timeframe, measured in yen.
Since then, those holdings have dipped slightly to 4.9 trillion yen as of late September.
Now, industry insiders are gearing up for accelerated expansion. Proposed regulatory adjustments could attract even more everyday investors by possibly lowering taxes on crypto profits and loosening restrictions on borrowing to trade and bundling assets into securities.
'PLENTY OF ROOM TO GROW'
'There are roughly three times more people with stock accounts than crypto accounts, which means there's plenty of room to grow,' explained Satoshi Hasuo, representative director and executive officer at the exchange Coincheck (CNCK.O).
'Our next challenge is figuring out how to bring these newcomers on board,' Hasuo added.
CJ Fong, who oversees Asia Pacific operations for crypto market maker GSR, noted that the company has ramped up discussions this year with Japanese exchanges and banks, primarily to boost liquidity for a variety of digital currencies.
This flurry of activity demonstrates Japan's comeback as a key player in the crypto world, with players riding the global wave sparked by U.S. President Donald Trump's policies.
'The Trump team's policies have pushed Japan's government and overseers to warm up to cryptocurrencies, ensuring the country doesn't lag behind,' stated Noriyuki Hirosue, CEO of the Bitbank exchange.
A report from Chainalysis, a platform tracking crypto data, placed Japan at 19th among the top 20 nations globally for cryptocurrency adoption this year.
NEW PRODUCTS AND ENTRANTS
Veteran exchanges are innovating with products and services ahead of potential rule changes that might treat digital asset earnings similarly to traditional stock profits, and open doors to options like exchange-traded funds (ETFs)—which are like baskets of assets traded on stock markets—and tax-advantaged savings plans.
The Japan Financial Services Agency is fine-tuning these regulatory proposals, which will face parliamentary review and, if approved, take effect around 2026 or 2027.
Drawing parallels to a 2012 overhaul in foreign exchange rules that multiplied trading volumes tenfold over a decade, Bitbank's Hirosue remarked, 'This could massively broaden the market.'
In August, Coincheck teamed up with the digital asset division of online marketplace Mercari (4385.T) to broaden the range of cryptocurrencies available to Mercari's less experienced users.
Mercari rolled out basic crypto trading in March 2023 and ballooned to 3.4 million crypto accounts by July 2025, accounting for more than a quarter of Japan's total 13.2 million accounts.
Industry experts credit this growth with bringing crypto to a wider, more casual audience.
SBI VC Trade is eyeing upgrades to its leveraged trading options, anticipating that borrowing limits—currently capped at twice the investment amount—could rise to roughly 5 to 10 times. Representative director and president Tomohiko Kondo shared this.
As part of SBI Holdings (8473.T), the company also intends to introduce lending in the stablecoin USDC (which aims to hold steady value like a digital dollar) and is investigating crypto ETF launches.
Japan's financial watchdog is mulling over letting banking groups offer cryptocurrency trading, a step aimed at increasing access and sparking competition, as reported by Nikkei in October.
CHASING THE HIGHS
This crypto frenzy in Japan aligns with retail investors hunting for better yields and branching out from low-return options like government bonds and savings accounts.
'Over 90% of my portfolio is tied up in cryptocurrencies. Diversification makes sense only if you've got a big nest egg already,' shared Umi Soyama, a 27-year-old employee at a Tokyo ad agency who's been dabbling in crypto for about two years.
'I enjoy taking calculated risks these days. Once I accumulate enough, I'll branch into stocks, bonds, and gold,' Soyama continued.
Some traders have jumped on Trump's pro-crypto stance. During his election month, SBI VC Trade reported a fivefold spike in new account openings.
Yet, the wild swings in crypto values pose real threats to novices.
'It can soar or plummet. Folks need to grasp this unpredictability—if they're investing, treat it as a side bet, not the main event,' advised Motonobu Matsuo, senior managing director of the Japan Securities Dealers Association.
With prices hovering near historic peaks, some investors are pulling back.
Kou Okamoto, CFO at a Tokyo financial firm, has allocated a small chunk of his investments to crypto since 2019. He mostly sticks to bitcoin now but is thinking about cutting back on 'altcoins'—cryptocurrencies besides bitcoin.
'You won't see 100 or 200 times returns from other investments, and looser rules might make crypto more appealing, but altcoins feel like gambling with odds just a tad better than the racetrack,' Okamoto said.
'I'm mulling shifting those funds into medium-risk, steady-return options,' he added.
And this is the part most people miss: While the excitement builds, experts warn that volatility isn't just a minor hiccup—it's a core trait of crypto that could wipe out gains in a flash. For beginners, think of it like this: Investing in crypto is akin to betting on a high-stakes game where the rules can change overnight, potentially leading to massive wins or devastating losses. Regulatory easing might democratize access, but it could also flood the market with inexperienced players, amplifying risks. Is this a golden opportunity or a recipe for disaster?
What do you think? Will Japan's regulatory shifts pave the way for sustainable growth in crypto, or are they ignoring the lessons from past crashes? Do Trump's policies really make crypto a safer bet globally? Weigh in below—let's discuss!
($1 = 150.7800 yen)
Reporting by Anton Bridge in Tokyo and Rae Wee in Singapore; additional reporting by Junko Fujita in Tokyo and Ankur Banerjee in Singapore; Editing by Sumeet Chatterjee and Kim Coghill
Our Standards: The Thomson Reuters Trust Principles.
