Why Understanding FSA-Approved Cryptocurrencies Matters
When registering a cryptocurrency exchange business in Japan, knowing which virtual currencies are approved by the Financial Services Agency (FSA) is critical. The FSA tends to impose stricter and lengthier reviews on unapproved cryptocurrencies to protect users from potential risks.
Key benefits of focusing on approved cryptocurrencies:
- Faster registration process: Applications using only approved currencies typically face smoother approvals.
- Regulatory compliance: Aligns with Japan's stringent financial regulations.
- Risk mitigation: Reduces operational uncertainties during the review phase.
👉 Explore FSA-compliant crypto exchanges
Note on FSA "Approval": The FSA confirms these cryptocurrencies fall under the Payment Services Act but doesn't endorse their value.
FSA-Approved Cryptocurrencies List (Updated 2024)
Here are the cryptocurrencies currently approved by Japan's FSA:
| # | Cryptocurrency | # | Cryptocurrency |
|---|---|---|---|
| 1 | Bitcoin (BTC) | 11 | NEM (XEM) |
| 2 | Ethereum (ETH) | 12 | Litecoin (LTC) |
| 3 | Ripple (XRP) | 13 | Ethereum Classic (ETC) |
| 4 | Bitcoin Cash (BCH) | 14 | MONA Coin (MONA) |
| 5 | Stellar Lumens (XLM) | 15 | Zen (ZEN) |
| 6 | Cardano (ADA) | 16 | Komodo (KMD) |
| 7 | Polkadot (DOT) | 17 | SushiSwap (SUSHI) |
| 8 | Chainlink (LINK) | 18 | Enjin Coin (ENJ) |
| 9 | Tezos (XTZ) | 19 | Qtum (QTUM) |
| 10 | Cosmos (ATOM) | 20 | IOST (IOST) |
Implications for Unapproved Cryptocurrencies
Cryptocurrencies not on the FSA's approved list face significant challenges:
- No legal circulation: Only approved currencies can be traded by registered exchanges in Japan.
- Market obsolescence: Non-approved currencies become inaccessible in Japan's regulated market, though they may remain tradable overseas.
Options for unapproved cryptocurrencies:
- Pursue FSA approval through rigorous compliance processes.
- Exit the Japanese market due to regulatory constraints.
👉 Learn about Japan's crypto registration process
Strategic Considerations for Exchange Operators
For New Registrants
- Prioritize approved cryptocurrencies to accelerate licensing.
- Submit a focused initial application, then expand offerings later via amendment notices.
For Existing Operators
- File timely notifications for new currency additions.
- Monitor FSA updates—the approved list expands periodically.
FAQ: Japan's Cryptocurrency Approval System
Q1: How often does the FSA update its approved cryptocurrency list?
A: The FSA reviews new submissions quarterly, with major updates typically announced in Q1 and Q3.
Q2: Can exchanges appeal for non-listed cryptocurrencies?
A: Yes, through a formal review process that evaluates technical and compliance merits.
Q3: Are stablecoins treated differently?
A: Japan has a separate framework for stablecoins under the 2022 Stablecoin Regulation Act.
Q4: What's the average approval timeline?
A: 6-12 months for new currencies, depending on complexity and documentation quality.
Q5: Do approved cryptocurrencies face ongoing audits?
A: Yes, exchanges must submit annual reports demonstrating continued compliance.
Q6: Can foreign exchanges serve Japanese users without FSA approval?
A: No—all platforms serving Japanese residents must register with the FSA, regardless of location.
Navigating Japan's Crypto Regulatory Landscape
Japan remains a pioneer in balanced crypto regulation. By understanding the FSA's approval framework, businesses can:
- Optimize registration strategies
- Minimize compliance risks
- Position for long-term market growth
For detailed guidance, consult licensed administrative scriveners specializing in financial registrations.