Cryptocurrency is an asset that can be traded online and is defined as having the following characteristics under the Payment Services Act:
(1) Can be used for payment to unspecified parties and can be exchanged for legal tender (Japanese yen, U.S. dollars, etc.)
(2) Are electronically recorded and transferable
(3) Are not legal tender or assets denominated in legal tender (e.g., prepaid cards)
Cryptocurrency is a system that allows the exchange of assets without the need for a bank or other third party.
Cryptocurrency can generally be obtained or redeemed from businesses called "clearing houses" or "exchanges" (cryptocurrency exchanges).
Only businesses that have registered with the Financial Services Agency and Local Finance Bureau may operate cryptocurrency exchanges.
Note that an amendment to the Payment Services Act in 2017 used the term "virtual currency", but in subsequent revisions to the Payment Services Act and Financial Instruments and Exchange Act in 2019, "virtual currency" was renamed "cryptocurrency".