Japan’s crypto market is expanding as exchanges and financial firms ride rising investor enthusiasm for digital assets amid expectations of regulatory easing, with a broader global appetite boosting local activity.

By July 2025, Japanese crypto assets hit a record 5 trillion yen, up about 25% from June and with bitcoin-denominated gains around 15%, though holdings eased to about 4.9 trillion yen by end-September.

The market context includes global crypto enthusiasm influenced by U.S. policy trends, positioning Japan as a leading crypto market and aiming to keep pace with regulatory shifts abroad.

Regulatory changes under discussion could cut taxes on crypto gains and ease leveraged trading and asset securitisation, potentially attracting more retail investors.

Rules are being refined to allow crypto investments through securities-like vehicles and possibly permit banking-group members to offer crypto trading services, with potential effects in 2026 or 2027.

Regulators are weighing broader access and competition, including allowing banking-group members to launch crypto trading operations.

Industry executives see substantial growth potential, noting the gap between securities and crypto accounts and expecting reforms that broaden access, including ETFs and tax-advantaged vehicles.

Bitbank and peers anticipate market expansion, likening regulatory overhaul to past FX rule changes that spurred volume growth over a decade.

Industry players say a large untapped market exists, with securities accounts outnumbering crypto accounts by about three to one, aiming to convert traditional finance users to crypto exposure.

The market environment is buoyed by global crypto adoption and a friendlier U.S. stance, though volatility and investor awareness remain ongoing risks.

Investors seek higher returns as inflation outpaces wages, with some viewing crypto as part of a diversified, higher-risk strategy while others urge focus on core assets like bitcoin and caution around altcoins.

Retail investors are chasing returns as traditional assets underperform, with anecdotes of sizable crypto allocations amid acknowledged volatility and risk.

Despite bright growth prospects, experts warn of volatility and advise treating crypto as a high-risk, not primary, investment strategy.

Established exchanges and newcomers are expanding offerings, including partnerships (such as Coincheck with Mercari) and SBI VC Trade’s plans to bolster leveraged trading, USDC lending, and potential crypto ETFs.

Market participants like Coincheck, GSR, Bitbank, Mercari, and SBI VC Trade are boosting liquidity and product availability in anticipation of regulatory changes, including possible ETFs and tax-advantaged vehicles.

Industry players are increasing liquidity provision and exploring new products as regulation evolves across multiple fronts.

Chainalysis data show Japan ranking 19th among the top 20 nations in crypto adoption this year, signaling room for further expansion.

Mercari and Coincheck expanded crypto access, with Mercari contributing to crypto accounts rising to 3.4 million by July 2025, about a quarter of Japan’s total.

Regulatory changes are expected to take effect in 2026 or 2027 if approved, with the FSA refining rules ahead of parliamentary debate.