Japan’s crypto market climbs to $33B as exchanges ramp up activity
The cryptocurrency market in Japan is rapidly growing as investors held a record ¥5 trillion ($33.16 billion) in digital assets by July. Rising costs and low returns on savings are pushing individuals to explore crypto for better short-term returns. Cryptocurrency adoption still trails securities accounts, but experts see a significant growth opportunity. Japanese exchanges are expanding services, forming partnerships, and introducing features to attract more users, including partnering with trusted platforms like Mercari. Japan's Financial Services Agency is considering regulatory reforms, such as lower taxes and increased borrowing limits, giving investors more flexibility, though changes will not be implemented until 2026-2027. Financial institutions like SBI VC Trade are preparing innovative products, including crypto ETFs and USDC lending services, to attract new investors. Additionally, regulators plan to allow banks to directly offer crypto services, increasing trust in digital asset trading.
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Rapid Growth of Japan's Cryptocurrency Market
The cryptocurrency market in Japan is expanding rapidly, driven by an increasing number of individuals purchasing digital coins and exchanges preparing for more lenient regulations. As of July, Japanese investors held a record ¥5 trillion ($33.16 billion) in cryptocurrencies.
New Services and Features Boost Interest
Cryptocurrency exchanges are actively adding new features, forming partnerships, and expanding nationwide to attract more investors. Many Japanese residents are looking for ways to grow their wealth as rising costs of goods and services outpace wages, and traditional savings accounts and government bonds offer exceptionally low returns.
The allure of rapid growth stories in cryptocurrencies is drawing more individuals who are now willing to take on higher risks for better returns in a shorter period.
Opportunity in the Investment Gap
Despite this growth, the Japanese crypto market still has significant room for expansion. There are currently about three times more people with securities accounts than those with crypto accounts. Satoshi Hasuo, an executive at Coincheck, explained that this gap presents a major opportunity, as even a small shift from stock investors to cryptocurrency could spur rapid market growth.
Additionally, global companies like GSR are collaborating with Japanese exchanges to minimize price fluctuations during trades, aiming to make the market more secure and appealing for users.
Regulatory Changes to Encourage Investments
Japan's Financial Services Agency (FSA) is considering regulatory adjustments to make cryptocurrency trading more attractive and accessible. Proposed policies include lowering tax rates for cryptocurrencies and increasing borrowing limits for experienced traders seeking greater flexibility.
Although these changes will likely not take effect until 2026 or 2027 due to parliamentary debates, anticipation is already growing. Exchanges and financial firms are gearing up to welcome a wave of new investors upon the implementation of these rules.
Strategic Partnerships Drive Adoption
Exchanges are forming key partnerships to reach a broader audience. For example, Coincheck partnered with Mercari, one of Japan’s largest online marketplace platforms, to integrate crypto trading features into a familiar app. This strategy has introduced digital assets to users who might not have otherwise considered investing due to unfamiliarity with specialized apps or tools.
This collaboration has significantly increased the number of new cryptocurrency accounts in Japan.
Innovation in Crypto Services
SBI VC Trade, a subsidiary of SBI Holdings, plans to increase borrowing limits from the current two times to up to five or ten times, making trading more attractive for seasoned investors. The company also aims to offer lending services using the stablecoin USDC, enabling users to earn profits without selling their assets.
Additionally, they are exploring the creation of crypto ETFs, which would provide a familiar financial product for new investors hesitant to directly engage in the cryptocurrency market.
Banks to Enter the Crypto Space
Japan’s financial regulator has announced plans to allow banks and bank-owned companies to directly offer cryptocurrency trading services. This move is expected to build trust among customers, as banks are already seen as reliable institutions.
The ability to trade digital assets safely through trusted banks could encourage more individuals to enter the crypto market.