How Foreigners Can Trade Cryptocurrency in Japan Legally

Japan has one of the world’s most tightly regulated crypto markets. For foreigners living in the country, trading crypto is possible — but there are important restrictions and requirements to know before you start. Let’s break it down 🇯🇵💹

📌 Who Can Trade on Japanese Exchanges?

Foreign nationals who are legal residents of Japan can open accounts on Japanese crypto exchanges.
To do so, you must:

• ✅ Have a valid residence card (在留カード)
• ✅ Submit a passport and proof of address (like a utility bill)
• ✅ Use a Japanese mobile number for SMS authentication

These rules apply to all licensed exchanges such as bitFlyer, GMO Coin, bitbank, and Coincheck.

❗ Tourists or short-term visa holders are not eligible.

💱 Limited Coin Selection

One key limitation of Japan’s crypto market is the narrow selection of tokens available:

• Most Japanese exchanges list 20–40 cryptocurrencies
• Only popular, stable coins like BTC, ETH, XRP, and ADA are available
• New or high-volatility tokens are often not approved by regulators

This is due to Japan’s Financial Services Agency (FSA), which strictly screens every coin before listing.

📉 Leverage Restrictions

Want to trade with leverage? Be prepared for very conservative limits:

• Japanese exchanges limit leverage to 2×
• Margin trading is only available on a few platforms (e.g., GMO Coin)
• This is much lower than overseas platforms like Binance or Bybit, which offer 10×–100× or more

These restrictions aim to protect investors from excessive risk, especially during volatile market conditions.

🧾 Tax and Legal Obligations

Even as a non-Japanese citizen, you must follow Japan’s cryptocurrency tax rules:

• 💸 Crypto gains are taxed as miscellaneous income
• 🪙 Selling, swapping, or using crypto for payment is considered a taxable event
• 💼 If your annual crypto gains exceed ¥200,000, you must file a tax return
• 📊 Gains on foreign exchanges are still taxable if you’re a Japanese resident

Tip: Keep detailed records of all transactions, including timestamps and JPY values at the time of each trade.

🏦 Number of Exchanges Is Limited

Compared to the U.S. or Europe, Japan has far fewer exchanges:

• 🇯🇵 Only around 30 licensed platforms, of which fewer than 10 are major players
• Many overseas apps (like Kraken, Binance) have exited Japan or operate with limited functionality

While this enhances safety, it reduces flexibility and forces many advanced traders to seek alternatives abroad.

⚠️ Common Issues to Watch Out For

1. Language barriers – Most platforms are Japanese-first, with limited English support
2. App availability – Overseas exchange apps may be removed from the Japanese App Store
3. Slower coin adoption – New tokens take months (or years) to be approved in Japan
4. Limited staking or DeFi options – Yield farming and Web3 features are rare on domestic exchanges

🛡️ Security and Regulation

On the positive side, Japan’s crypto environment is very safe:

• ✅ Exchanges must store 95%+ of customer funds offline (cold wallets)
• ✅ All platforms undergo FSA inspections
• ✅ Customer assets are segregated and insured in case of hacks

This makes Japan one of the most secure countries in the world for holding crypto.

✍️ Summary Table

🧠 Final Thoughts

Foreign residents in Japan can legally trade crypto — but the ecosystem is far more conservative and controlled than in many other countries.

If you prefer safety, simplicity, and regulated trading, Japanese exchanges are a solid choice.
But if you’re an advanced trader looking for a broader range of assets or leverage, you’ll need to weigh the risks of using foreign platforms carefully.

Either way, always keep your wallet secure and stay compliant with Japan’s tax laws 🧾🔐