Fintech & payments regulation in Japan (2026)
Fintech and digital payments in Japan: licensing regime.
Japan operates a mature, in-force licensing regime for non-bank payments and e-money under the Payment Services Act, administered by the FSA. The PSA creates distinct registration categories for Fund Transfer Service Providers (three tiers by ticket size), Prepaid Payment Instrument Issuers, Electronic Payment Instrument Service Providers (stablecoin exchange/intermediation), and Electronic Payment Service Providers (open-banking API intermediaries). The 2025 amendment package, effective 1 June 2026, extends the regime to foreign trust-type stablecoins, tightens asset-conservation rules, and creates a new crypto-asset / electronic-payment-instrument intermediary business.
Legal framework
Payment Services Act (PSA, Act No. 59 of 2009, as amended through 2025 — in force 1 June 2026); supervised by the Financial Services Agency (FSA) and Local Finance Bureaus. Supplementary regimes: Banking Act (open-banking APIs), Installment Sales Act (credit/BNPL, administered by METI).
Key points: digital payments & fintech in Japan
Three-tier Fund Transfer Service Provider licensing
Non-banks must register with the Local Finance Bureau as a Type I (unlimited, authorisation of business plan required), Type II (≤ ¥1 million per remittance) or Type III (≤ ¥50,000 per remittance) Funds Transfer Service Provider. Tiering was introduced by the 2020 PSA amendment to apply proportionate conduct, user-asset-protection and AML duties.
E-money / prepaid instruments (PPII regime)
Issuers of third-party-accepted prepaid payment instruments (including server-type e-money, QR-code wallets, prepaid cards) must register as Prepaid Payment Instrument Issuers under the PSA; own-brand issuers only need to notify once outstanding balances exceed ¥10 million. Issuers are subject to deposit of ≥50% of outstanding balance with a Legal Affairs Bureau for user protection.
Stablecoins as 'electronic payment instruments'
PSA amendments effective 1 June 2023 limited stablecoin issuance to licensed banks, trust companies and registered funds-transfer providers, and created a registration category for Electronic Payment Instrument Service Providers (handling/intermediation). A further FSA ordinance taking effect 1 June 2026 classifies qualifying foreign trust-type stablecoins (e.g. USDC-style) as electronic payment instruments usable in Japan, subject to equivalent foreign licensing, audited collateral and FSA-cooperable supervision.
Open banking under the amended Banking Act
The 2017 Banking Act amendment introduced a registration regime for Electronic Payment Service Providers (denshi kessai tō daikō gyōsha) and obliged banks to publish open-API policies and contract with registered providers. Over 130 banks have implemented APIs; the Zengin interbank network launched a standardised API Gateway (replacing the legacy Relay Computer) in 2025, with Wise becoming the first non-bank to settle via it in 2025.
Instant-payment rails: Zengin System and overhaul to 2030
Domestic yen credit transfers run on the Zengin System operated by the Japanese Banks' Payment Clearing Network, with final settlement over the BOJ-NET at the Bank of Japan. The Clearing Network published a blueprint to replace the ~50-year-old core by 2030, with a build/no-build decision due by end of FY2026.
BNPL regulated indirectly via Installment Sales Act
There is no bespoke BNPL law. Where deferred-payment arrangements exceed two months, providers must register with METI as a Comprehensive or Individual Credit Purchase Intermediary under the Installment Sales Act and comply with credit-assessment and consumer-protection duties; shorter 'pay-in-30-days' models often sit outside the Act, and consumer-protection authorities continue to monitor the sector.
FSA Fintech Policy Office and single-window supervision
The FSA's Fintech Policy Office / Payment Services Monitoring Office licenses and supervises FTSPs, PPIIs, Crypto-Asset Exchange Service Providers and Electronic Payment Instrument Service Providers, and runs the FinTech Support Desk for pre-application guidance. METI shares oversight for credit cards and certain advanced payment services.
Timeline of decisions
- EnforcementJPYC launches as Japan's first FSA-registered yen stablecoin
JPYC Inc. became the first issuer to obtain FSA registration and launch a fiat-pegged 'electronic payment instrument' (yen stablecoin) under the 2023 framework, proving out the bank/fund-transfer/trust-issuer model for digital-money stablecoins.
Elliptic
- Guidance · officialFSA discussion paper proposes moving crypto assets under securities law
The FSA published a discussion paper examining a major overhaul that would reclassify crypto assets as financial instruments under the Financial Instruments and Exchange Act, adding insider-trading bans, disclosure and stricter custody rules, with a bill targeted for 2026.
FSA
- LawStablecoin and crypto amendments take effect
The amended Payment Services Act came into force, defining fiat-pegged 'digital-money' stablecoins as electronic payment instruments (issuable only by banks, fund-transfer providers and trust banks), creating a registration regime for distributors, and adding crypto travel-rule obligations.
Crypto Council for Innovation
- LawDiet passes stablecoin amendment to the Payment Services Act
Japan's parliament approved the bill creating the world-leading framework that legally defines fiat-backed stablecoins as 'electronic payment instruments' and licenses their issuers and intermediaries, prioritizing redemption guarantees and consumer protection.
Tokyo International Law Office
- Law · officialDiet passes Payment Services Act amendment regulating stablecoins
Japan's Diet approved the bill (submitted 4 March 2022) introducing the Electronic Payment Instruments framework for stablecoins and enhancing transaction-monitoring and prepaid-instrument rules. It established the statutory basis for licensing stablecoin issuers and intermediaries.
Japanese Law Translation (Ministry of Justice)
- Law2020 Payment Services Act amendment takes effect (three FTS tiers)
The amended Act entered into force, replacing the single ¥1 million cap with three risk-tiered funds-transfer categories: Type I (authorization for transfers over ¥1M), Type II (registration, up to ¥1M), and Type III (light-touch, up to ¥50,000).
Morrison Foerster
- LawThree-tier funds transfer licensing framework comes into force
The 2020 PSA amendment took effect, splitting fund transfer service providers into Type I (approval, large-sum remittances), Type II (registration, the prior ¥1m cap regime) and Type III (registration, small-sum only). It introduced risk-proportionate licensing for non-bank payment firms.
IFLR
- LawCrypto custody regulated and 'crypto asset' terminology adopted
Amendments took effect requiring custodial wallet providers to register, mandating segregation/cold-storage of customer crypto, banning misleading ads, renaming 'virtual currency' to 'crypto asset', and bringing crypto derivatives under the Financial Instruments and Exchange Act.
Sygna
- Law · officialCrypto-asset exchange registration regime takes effect
The 2016 PSA amendment entered into force, defining virtual currencies and requiring exchanges to register with the FSA under conduct and prudential rules (minimum capital, asset segregation, audits, AML). Japan became the first country to license crypto exchanges under a national payments law.
U.S. Library of Congress
- Law · officialPayment Services Act enters into force
The Payment Services Act (Act No. 59 of 2009) took effect, creating the foundational licensing regime for non-bank funds transfer services and prepaid payment instruments, with registered providers initially capped at ¥1m per remittance. It remains the core statute governing digital payments and fintech in Japan.
Japanese Law Translation (Ministry of Justice)
Sources
- japaneselawtranslation.go.jp/en/laws/view/3078/en
- japaneselawtranslation.go.jp/en/laws/view/5199
- fsa.go.jp/en/news/2018/20180717.html
- boj.or.jp/en/paym/outline/pay_boj/pss0305a.pdf
- zengin-net.jp/en/announcement/pdf/announcement_20230316.pdf
- zengin-net.jp/en/announcement/
- imf.org/-/media/files/publications/cr/2024/english/1jpnea2024008.pdf
- mofo.com/resources/insights/200715-reforms-japanese-regulations.html
- globallawexperts.com/japan-payment-services-act-2026-guide/
- stripe.com/resources/more/installment-payments-in-japan
Next for Japan: Digital Nomad & ResidencyDedicated visa
Next topicOrientation, not legal advice: verify against the primary sources linked above. Last verified 11 Oct 2026. Methodology & how to cite · State of Technology Regulation 2026