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How to Buy Crypto in Japan

Posted on Jun 24, 2024
How to Buy Crypto in Japan

Japan stands as a pioneering nation in the realm of cryptocurrency, having been among the first to formulate specific regulations following the infamous Mt. Gox hack. Today, the country is home to approximately 400 businesses focused on cryptocurrencies and continues to be at the forefront of digital currency innovation.

The proactive approach taken by Japanese regulators has yielded clear guidelines for crypto exchanges, detailing the requirements for KYC/AML procedures and crafting a taxation policy that aims to benefit all stakeholders. This regulatory clarity supports the nation's strong and innovative financial landscape, making Japan one of the most advanced economies engaging with digital currencies.

Japan’s commitment to research and development in this sector is evident from its academic pursuits into blockchain and cryptocurrency. Reinforcing its reputation for technological advancement, Japan has not only approved over 20 local crypto exchanges but has also seen a 30% increase in the number of blockchain-related companies this year alone. The country is also exploring the potential of a digital yen, indicating serious national interest in furthering digital currency use.

Given this supportive environment, it’s excellent news for cryptocurrency enthusiasts: not only can you buy Crypto in Japan, but the government is also actively encouraging its adoption. This makes Japan a highly attractive crypto hub for both investors and researchers alike.

Buying bitcoin and cryptocurrencies in Japan

In Japan, acquiring Bitcoin and other cryptocurrencies is streamlined and can typically be completed in under 10 minutes.

Step-by-Step Guide:

  • Register with a Cryptocurrency Exchange: Japan boasts a selection of seven trusted cryptocurrency exchanges, with bitFlyer and Coincheck being the most prominent, serving over 4.2 million active users combined. These platforms are known for their user-friendly interfaces, multiple payment options, and a diverse range of available cryptocurrencies. Each exchange varies in terms of transaction fees, security measures, payment options, and other features. To choose the best one for your needs, explore the "info" tab on each platform's website. Remember, your choice will depend on your specific preferences for cryptocurrencies and payment methods. You can always register with additional exchanges later if your needs change.
  • Complete KYC Verification: Upon registering, you'll need to complete a Know Your Customer (KYC) process, verifying your identity and address. This is a mandatory legal step for nearly all exchanges in Japan. For this, have your photo ID ready to take pictures of both the front and back. Most verifications are processed instantly, though some can take up to 1-2 days.
  • Make a Fiat Deposit: Connect a bank account or credit card to your chosen exchange to start purchasing cryptocurrencies. BitFlyer and Coincheck support various payment methods including Bank Transfers, Credit Cards, and Wire Transfers. The time it takes for funds to be credited can vary based on the payment method used, ranging from a few minutes to several days.
  • Purchase Cryptocurrency: With your account funded, you’re ready to buy cryptocurrency. You don't need to purchase an entire bitcoin; most exchanges allow you to buy fractional amounts, starting from a few dollars worth.
  • Transfer to a Personal Wallet: After purchasing, it’s advisable to move your cryptocurrency to a secure personal wallet, rather than leaving it on the exchange. This step is crucial as it reduces the risk of losing your assets to potential exchange hacks. Using a personal hardware wallet enhances your security.

This streamlined process ensures that even newcomers can navigate the crypto market in Japan with ease, thanks to the country's advanced regulatory framework and robust technological infrastructure.

Requirements for Buying Cryptocurrency in Japan

Before diving into the world of cryptocurrencies in Japan, ensure you have the following essentials prepared:

  • Valid Identification: You will need a passport, national identity card, or driver's license to complete the Know Your Customer (KYC) process. This step is crucial for identity verification and is a standard requirement across all Japanese cryptocurrency exchanges.
  • Secure Internet Connection: Always use a private and secure internet connection when dealing with cryptocurrencies. Public WiFi networks are not recommended due to potential security vulnerabilities.
  • Mobile Phone: A mobile device is necessary for two-factor authentication (2FA), adding an extra layer of security to your transactions and account settings.
  • Bank Account or Credit Card: You’ll need either a bank account or a credit card to make fiat deposits. These funds are used to purchase cryptocurrencies on various platforms.
  • Crypto Wallet: While most exchanges provide built-in wallets for temporary storage, it is highly advisable to transfer your cryptocurrencies into a personal cold wallet (offline wallet). This step significantly enhances the security of your assets by reducing the risk of online thefts and hacks.

Following these requirements will help ensure a safe and efficient transaction process as you venture into cryptocurrency trading in Japan, a country known for its stringent yet clear regulatory stance on digital currencies.

Best Exchanges To Buy Bitcoin in Japan

bitFlyer

Location: Based in Japan, bitFlyer is the leading cryptocurrency exchange, renowned for its significant Bitcoin trading volume in the BTC/JPY market.

Cryptocurrencies Offered: bitFlyer provides a diverse selection of over 10 cryptocurrencies, including Bitcoin, Bitcoin Cash, Ether, Lisk, Ethereum Classic, Monacoin, Litecoin, Tezos, and XRP.

Funding Methods: Users can fund their accounts through various methods such as Bank Accounts, Credit Cards, Debit Cards, and Wire Transfers, providing flexibility in how they manage their finances.

User Experience: bitFlyer offers tailored trading interfaces that cater to both beginners and advanced traders, ensuring a user-friendly experience regardless of trading proficiency.

Fees and Verification:

  • Fees: bitFlyer boasts very low fees, making it an economical choice for traders.
  • Verification Time: The verification process is efficient, generally completed within one day, facilitating quick access to trading activities.

Regulatory Compliance: bitFlyer maintains a strong relationship with regulatory bodies to ensure compliance with all relevant laws, enhancing its reputation as a trusted platform.

Pros:

  • High Liquidity: Handles heavy trading volumes, especially in the BTC/JPY pair, ensuring liquidity and stable prices.
  • Regulatory Trust: Works closely with regulators, securing a trustworthy environment for users.
  • Dual Interfaces: Offers customized interfaces for different skill levels, enhancing the trading experience.

Cons:

  • Limited Global Reach: While dominant in Japan, bitFlyer’s presence and features might be limited outside of Japan.
  • Complex for Beginners: Despite having a beginner interface, the plethora of features and options can overwhelm new users.

Reputation: bitFlyer is highly trusted within the cryptocurrency community, particularly in Japan, due to its robust security measures and consistent reliability in facilitating digital asset transactions.

By combining advanced technology with user-centric features, bitFlyer continues to be a top choice for cryptocurrency traders seeking a reliable and efficient platform in Japan and beyond.

Binance

Location: Binance is a global cryptocurrency exchange that provides a platform for trading various cryptocurrencies. It has positioned itself as one of the largest international exchanges by trading volume.

Cryptocurrencies Offered: Binance supports a broad range of cryptocurrencies, with over 200 coins available for trading including Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), and many others.

Funding Methods: Binance allows users to deposit funds using a variety of methods including bank transfers, credit cards, debit cards, and even cryptocurrency transfers from other wallets.

User Experience: The platform is designed to accommodate both novice traders and experienced professionals, featuring basic and advanced trading interfaces which provide different levels of complexity and detail.

Fees and Verification:

  • Fees: Binance is known for its relatively low trading fees and discounts for those using its native BNB tokens to pay fees.
  • Verification Time: Verification times vary; simple identity verification can be quick, but more comprehensive verifications requiring additional documentation might take longer.

Regulatory Compliance: Binance has faced various regulatory challenges across different countries, but it continues to adapt its operations to meet the changing regulatory landscapes, aiming to ensure compliance and secure trading.

Pros:

  • Extensive Coin Selection: Offers a vast array of cryptocurrencies, which provides users with many trading opportunities.
  • Competitive Fees: Lower fees compared to many other exchanges, with further reductions possible through the use of BNB.
  • Robust Trading Platform: Features like futures and options trading, margin trading, and a decentralized exchange are available.

Cons:

  • Regulatory Scrutiny: Has encountered regulatory issues in several countries, which can impact its services and user confidence.
  • Complexity for Beginners: The wide range of features and trading options can be overwhelming for new users without prior trading experience.

Reputation: Despite facing regulatory hurdles, Binance maintains a strong reputation in the crypto community for its comprehensive services, security measures, and innovation in the cryptocurrency trading space.

Binance continues to innovate and expand its services, making it a preferred choice for many crypto traders worldwide, looking for versatility and a broad range of trading options.

Coincheck

Location: Based in Japan, Coincheck is one of the major cryptocurrency exchanges in the region, known for providing a user-friendly platform that catifies to both beginners and experienced traders.

Cryptocurrencies Offered: Coincheck offers a selective range of popular cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and NEM (XEM), among others.

Funding Methods: Users on Coincheck can fund their accounts using local bank transfers, credit cards, and cryptocurrency transfers, which facilitates easy access to the market for a wide range of investors.

User Experience: The platform features a straightforward interface that is easy to navigate for new users, while still providing advanced tools for more experienced traders.

Fees and Verification:

  • Fees: Coincheck strives to maintain competitive fees, though specific rates can vary based on the market and transaction type.
  • Verification Time: The verification process typically completes within a few hours to a couple of days, depending on the level of verification required and the current demand.

Regulatory Compliance: Coincheck operates in strict compliance with local regulations, ensuring that it maintains a secure and reliable trading environment. This compliance was strengthened especially after experiencing a significant hacking event in 2018.

Pros:

  • User-Friendly Interface: Particularly favorable for new entrants into the cryptocurrency market.
  • Strong Market Presence in Japan: One of the leading platforms in Japan, offering high liquidity for the major cryptocurrencies.
  • Enhanced Security Measures: Post-2018 hack, Coincheck has significantly overhauled its security protocols to protect user assets.

Cons:

  • Limited Cryptocurrency Selection: Compared to global giants like Binance, Coincheck offers fewer cryptocurrencies, which may be a drawback for some users.
  • Past Security Breach: Although security has been enhanced, the memory of the 2018 hack still affects its reputation.

Reputation: Coincheck has worked diligently to rebuild its reputation following the 2018 security breach, focusing on improving security measures and customer trust. It remains a popular choice among Japanese traders and is gaining traction once again as a reliable platform.

Coincheck continues to cater to the needs of its diverse user base, ensuring it remains a competitive player in the rapidly evolving cryptocurrency trading landscape.

Is Crypto Legal in Japan?

Japan is among the few countries that have officially legalized the use of cryptocurrencies, establishing itself as a leader in creating a progressive regulatory framework for digital assets.

  • Global Context: Globally, only a handful of regions including Australia, Canada, the United States, the European Union, South Korea, the United Kingdom, and Germany have embraced legal frameworks for cryptocurrencies. Japan not only joins these ranks but is often considered a frontrunner in regulating the crypto environment.
  • Regulatory Developments: The Financial Services Agency (FSA) of Japan has been pivotal in shaping crypto regulation. In 2014 and 2015, the FSA set up two groups specifically to address issues related to cryptocurrencies. This led to the development of robust regulations focusing on cryptocurrency exchanges, anti-money laundering (AML) practices, and taxation.
  • Requirements for Crypto Exchanges: To operate a cryptocurrency exchange in Japan, one must register with the Finance Bureau, maintain a physical office within the country, and appoint a resident representative. This rigorous process ensures that all operational exchanges meet high standards of security and compliance.
  • AML Policies: Japanese exchanges are required to implement stringent AML procedures. They must report any suspicious transactions to the authorities immediately. This includes a mandatory Know Your Customer (KYC) process that all users must undergo upon signing up on a platform.
  • Taxation: Profits from cryptocurrency trading are taxed up to 55% in Japan. This income is classified as miscellaneous income under the Income Tax Act and is added to any other personal income, making taxation a significant consideration for traders.

Using Japanese Credit Cards to Purchase Cryptocurrency

When it comes to buying cryptocurrency with a credit card, it's not solely about the country you're in but more about the payment options supported by the cryptocurrency trading platform you choose.

  • Credit Card Usage in Japan: In Japan, many leading cryptocurrency exchanges such as Coincheck, bitFlyer, CEX.IO, and Binance allow the use of credit cards for purchasing digital currencies. Credit cards from major Japanese banks, such as Japan Post Bank and Mizuho, which offer Mastercard and Visa options, are widely accepted. These are just a few of the available choices, as several other banks and card services also support crypto transactions.
  • Legal Considerations: It's important to remember that the legality of buying crypto with credit cards can vary significantly by country. In regions where cryptocurrency is legal, like Japan, using a credit card to buy digital currencies is generally straightforward and regulated.
  • A Word of Caution: If you're in a country where cryptocurrency is banned, such as Algeria, Egypt, or Morocco, you should avoid linking your credit card to any crypto trading platforms. In these countries, engaging in cryptocurrency transactions can lead to legal repercussions, including potential criminal charges.

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